CG
and Corporate Social Responsibility (CSR) have become buzzwords
in the post millennium corporate culture of India. This case
describes the CG and CSR practices of the three Indian private
companies namely ITC Ltd., Infosys Technologies Ltd., and
Reliance Industries Ltd. These three companies were chosen
as they represent three distinct categories among the Indian
private companies. ITC Ltd is one of the very few Indian companies
which does not have an identified promoter and is fully managed
by professionals (Though, a foreign company has around 32%
stake in the company, it is not identified as a promoter as
it does not control the company).
Reliance Industries is at
the other end of the spectrum, with one family in control
of the management and with a controlling stake of above 40%.
Infosys Technologies falls in between, as it has six promoters
who do not belong to a single family and their stake is only
around 16% (all the shareholding levels were as on March 31,
2007). Hence, a study of CG and CSR practices of these companies
will throw light on the differences among the private companies
with different management control and shareholding patterns.
ITC
official believes and propagates `commitment beyond the market'.
It is also one of the pioneers to put in place a formalized
system of CG. ITC defines CG as a systemic process by which
companies are directed and controlled in order to enhance
their wealth generating capacity. This definition reminds
one of Milton Friedman who says that businessmen should concentrate
only on profits and nothing more. However, that is not the
case. ITC also believes that the growth process should ensure
that these resources are utilized in a manner which meets
the stakeholders' aspirations and societal expectations. What
the company calls as the development of the `triple bottomline'
includes the nurture and regeneration of nation's economic,
ecological and social capital. |
