national seminar on standards for quality & empowerment good governance

National Seminar on Standards for Quality & Empowerment

Good Governance

Dinesh AgrawalGM (CSR), NTPC

22 June 2011, New Delhi

222 June 2011 by Dinesh Agrawal at DRDO, New Delhi

Organisational Governance

• Organizational governance is the set of processes, customs, policies, laws and institutions affecting the way in which a organization is directed, administered or controlled.


Good Governance

• It includes the relationships among the constituents and the goals for which the organization is governed.

• It is operationalised by the persons having the authority and responsibility for pursuing the organization’s objectives, i.e. the purpose for which organization exists.

• It is maximizing value for all stakeholders, transparency in functioning, and respect and mutual trust amongst all constituents of organization and stakeholders.


Constituents

• Owners, members or constituents of the organization like share holder in case of companies and members of general body in case of societies, cooperatives etc.

• Board of directors• Management • Employees, • Suppliers, contractors• customers, • funding agencies, • regulators, • the environment ,

• community


Principles of Good Governance

• Integrity

• Accountability

• Transparency

• Ethical conduct and values



• Integrity - Integrity comprises perceived consistency of actions, values, methods, measures and principles.

• Integrity is often seen as the quality of having a sense of honesty and truthfulness with regard to the intentions or motives for one's actions.



• Accountability – is the state of being answerable for decisions and activities to the organization's governing bodies, legal authorities and, more broadly, its stakeholders.

• Accountability should focus both, on compliance, with rules and ethical principles, and on achievement of results.



• Transparency - Transparency is a principle of access to, or disclosure of, appropriate information.

• It refers to the provision of making available relevant information to the various stakeholders, both internal and external to the organization, who may be affected by, or have an interest in, its decisions and actions.



Ethical conduct and values - The organization’s stakeholders expect the organization to conduct its activities in an ethical manner.


Ethical conduct and values

Ethical conduct and values -Not only delineate the minimal standards below which a

persons actions will not be tolerated, but articulate a set of values that a person should aspire to emulate.

What makes actions right and wrong?

Is it a Virtue or Duty or Rights?

Q: A man in a sinking boat with mother, wife and little daughter can save only one person. Who will she be?


Legal Compliance

• The applicable laws, statutes, regulations

• The personnel responsible for compliance.

• Audits that compliance is evaluated and reported to top management and the board.

• Due awareness of the legal responsibilities and liabilities to partners/business associates, suppliers/distributors in the supply chain, etc. where ever applicable.


Stakeholder Identification & Engagement

• Identification of stakeholder (both internal and external).

• Identification of needs and concerns of the stakeholders

• Stakeholder Engagement Process– Setup appropriate channels/ forums/

structures for their engagement


Stakeholder and their concern

Stakeholder Classification

Their Concern Engagement Process

Information Sharing

Customer Quality of Product and services including issues relating to health and safety

Employee Quality of work environment and recognition, career progression.

Investors/ Shareholders/ Financers

Return on InvestmentRisk Minimization

Supply Chain such as suppliers and distributors

Terms of doing business including financial and credit limits;Capacity building;Fair and transparent process;


Stakeholder and their concern

Stakeholder Classification

Their Concern Engagement Process

Information Sharing

Environment Protection and conservation in context of organization’s activities

Government Financial accounting and compliance to laws; national image, security

Community Sustainable development;Protection against adverse impact;Compliance to Social mandates

Civil Society Sustainable development; Respect towards social, cultural, traditions and practices;

business associates

Terms of doing business including financial and credit limits; Fair and transparent selection process;


Responsiveness to stakeholder

•The information given is:–Relevant –Complete–Reliable–Neutral.–Understandable–Accessible –Equitable–Timely Response


Policy, Planning & Strategy

• Organization to define it’s vision, mission and value statement.

“One day Alice came to a fork in the road and saw a Cheshire cat in a tree. Which road do I take? she asked. Where do you want to go? was his response. I don't know, Alice answered. Then, said the cat, it doesn't matter.”


Governance structure

• Define its vision, mission and value statements.

• The governance structure is defined by a hierarchy of levels which includes:

» a) Owners/Promoters» b) Board, and» c) Management (Strategic/Operational)

» With clarity of roles, responsibility, authority, accountability and liability at each functional level.

» Effective flow of communication and decisions fully understood by each functionaries


Documentation

• Documentation

– Vision, mission and values statement– Code of Conduct for Board, employees, etc.– Roles, Responsibilities, authorities, accountability and

liability of the Board members, management etc.– Terms of reference of Board and other committees– Specific policies (e.g. HR, gender, environment, etc)– Grievance redressal mechanisms for all stakeholders


Monitoring and Review

• Monitoring and review

– Through Internal & external audits and audit committees – Committee for reviewing the good governance practices of

the organization to review» Policy deployment» Feedback system

– System of identification and reporting of all breaches– System of checking legal and financial compliances.– System of checking non-compliance in ethical conduct, etc.


Reporting & Communication

Reporting– Establishment of proper

reporting mechanisms. – System for timely statutory

and regulatory reporting.

Communication– Channels of communication

with the respective functionaries for communicating with the respective stakeholders.


Maturity model

• The issue of governance is progressive and evolving. • It is a journey towards making right decisions considering

the interest of all stakeholders. • It goes much beyond legal compliance. • It even goes ahead of expectations of stakeholders.

Road map based on the concept of capability maturity model considering 5 levels of maturity guides the journey to good governance.


Maturity model

• Initial Level: – To some how comply to bare minimum legal requirements. Adhoc

approach with focus on managing the crises.

• Basic Level– Some structure with management controls including planning,

monitoring and control system for ensuring compliance to all legal requirements.

• Defined Level– Well defined and written roles and responsibilities for all decision

makers.


Maturity model

• Managed Level– defined vision, mission and goals and have policies for

each stakeholder

• Optimized level– Strive to take care of interest of all stakeholder way

beyond the statutory or legal requirement.– Look towards its long term sustainability.


Good Governance – Risk Mgmt


Good Governance – Achieving Goals


Our Role

• With great power comes great responsibility

• Not everyone is meant to make a difference. But for me, the choice to lead an ordinary life is no longer an option.


Our Role

• I'm trying to free your mind, Neo. But I can only show you the door. You're the one that has to walk through it.

Thank You

national seminar on standards for quality & empowerment good governance

Documents

new delhiby dinesh agrawal

valuesby dinesh agrawal

communityby dinesh agrawal

new delhiconstituentsowners

new delhiethical conduct

new delhigood governanceit

constituents of organization

organizations stakeholders