Mr. Rajesh Tarpara is a qualified Company Secretary and Law graduate with 22 years of professional experience. Mr. Tarpara was the Chairman of Western India Regional Council of the Institute of Company Secretaries of India (ICSI) in 2022 and was also the Chairman of Ahmedabad Chapter of ICSI in 2014. Additionally, Mr. Tarpara is a Central Council Member of ICSI for 2024 and operates at R. C. Tarpara & Associates and RTBR & Associates, leading Practicing Company Secretarial firms. Mr. Tarpara also possess additional skills in Information Technology and has varied expertise in the fields of corporate laws and taxation laws.
In this interaction, Mr. Tarpara offers his insightful opinions on how boards in today’s age can use corporate governance provisions to maintain better accountability.
In recent years, what modifications have you observed in corporate governance?
Corporate governance has undergone substantial change in recent years. Previously seen as a compliance activity, corporate governance can be effectively used as a strategic enabler that enhances business performance. Today’s governance involves more than just following the law; it also involves fostering trust. For example, SEBI’s amendments to Clause 49 allowed for innovative approaches to appropriately balance legislative and regulatory reforms for corporate expansion and foreign investment. The rules increased corporate governance transparency and shareholders’ participation in decision-making.
What are the biggest obstacles that boards must overcome to maintain governance standards?
Boards are receiving an increasing number of demands from different stakeholders. One of the hardest things to do is strike a balance between generating long-term value and providing immediate shareholder rewards. The dynamic nature of legal frameworks demands that governance procedures be flexible. Using technology, such as an effective board meetings tool, boards can have instant access to a disparate set of documents including agendas, minutes, resolutions, board evaluation among other activities. Better collaboration amongst board members can certainly make corporate governance more agile.
In what ways can boards ensure that accountability is being upheld?
An essential component of efficient corporate governance is clarity between different roles pertaining to executive leadership and the board. Clearly defining roles and having competent decision-making procedures, backed by systematic assessments and business continuity plans, helps guarantee that boards maintain the highest accountability standards. Technology, including emerging technology and artificial intelligence, can again be of great help with clear action assignments, action tracking and compiling a holistic action taken report.
What aspects of sustainability can be influenced by corporate governance?
Corporate governance rules now strongly incorporate sustainability on a global scale. Boards are essential in developing strategies that support long-term value while taking ESG effects into account. As seen recently at the 2024 United Nations Climate Change Conference held in Baku, Azerbaijan, one of the key takeaways was the urge by COP29 towards the corporate sector and international financial institutions to invest in green innovation and expand climate finance. To achieve these effectively at an organizational level, ESG policies can be included as a part of risk management and board performance evaluation in line with the organization’s mission statement.
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