Thursday, 29 January 2009

Scandals and Corporate Governance

During my recent trip to India, the papers were full of stories about corporate governance triggered by the recent Satyam Scandal. Satyam was one of India’s top 4 IT Companies and the 2008 winner of the coveted Golden Peacock Award for Corporate Governance under Risk Management and Compliance Issues, of which it has since been stripped.

The arrest of Satyam’s senior leaders including, Vadlamani Srinivas, Ramalinga Raju, and his brother Rama Raju on charges of false accounting and fraud in what has been described as India’s ‘Enron’, coupled with the Madoff scandal in the US, the largest investor fraud ever committed by a single person, clearly demonstrates the need for system of corporate governance based on values and transparency.

These 2 scandals highlight the danger of putting too much faith in a single person rather than an Organisations as a whole, the leading figures in both scandals took advantage of their positions and reputations to defraud large numbers of people who trusted and entrusted them with their money. While the majority of business leaders are upstanding and trustworthy, there should be no circumstances when a leader should be above their organisation.

Thursday, 15 January 2009

India and the emerging markets the solution to the Credit Crunch?

In the context of the recession and ‘credit crunch’ I think people would have been amazed had they been in Gujarat yesterday and the day before, nearly 20 000 people attended the opening of the Vibrant Gujarat Global Investor’s summit 2009. India’s captains of industry and its top business leaders were present for the summit as well as representatives from governments around the world.

In the session I chaired, ‘Infrastructure with a focus on Special Investment Regions’ there was a stampede to sign MOU’s, it was an amazing site, to see so much confidence in India’s particularly Gujarat’s growth. Companies from all round the world were falling on each other to sign, Japan, Germany, the US, the UK, China, Korea and South Africa among many others.

The PM of Kenya and the Vice President of Uganda along with the numerous ministers from many African and Asian countries who were present for the summit seemed almost dazed at first by the response from business were desperate to learn from the experience.

The summit is the perfect antidote to all the news floating around about investors to nervous to invest. It was a hugely encouraging experience, India; especially Gujarat is the place to be. I have no doubt the solution to the credit crunch lies in emerging markets like India where there is still growth and the opportunities for business, as demonstrated over the last couple of days, is huge.

Thursday, 8 January 2009

Dubai, Singapore and Malaysia optimistic about global financial crisis

Before the Christmas break I had the pleasure of taking a whistle stop tour of Dubai, Singapore and Malaysia. It gave me the opportunity to see firsthand just how ‘global’ the current financial crisis is, reaching out from the west, and affecting the rest of the world.

In Dubai the construction industry, long a pillar of the countries growth, has ground to a virtual halt and the price of Real Estate has dropped dramatically, but there is none of the panic or pessimism that’s visible in the west.

Following meetings with several of the financial groups in Dubai the impression I received was one of optimism in the long term. There was the belief that this current crisis was inevitable, that the last few years growth had been unrealistic and un-sustainable, and that the current recession is a correction.

There is even less pessimism in Kuala Lumpur and Singapore, the belief that the storm can be weathered is strongly rooted and that after a period of stock taking growth will resume, albeit with more realistic returns. This feeling of optimism is something that I and the CBC will tap into as we actively participate in both Dubai and Malaysia later in the coming year.