Monday,

10 @ Campus October 19, 2009

Preparing governance professionals: call of the times

Governance professionals play a key role in the corporate world and need to assert themselves amongst external stakeholders and management

NKJain managementaccountants,independent Brothers and the like happened as both their importance in promoting good gov- Institutes should earnestly commit to
and non-executive directors, company thecauseandeffectof theglobalfinancial ernance in the financial sector, banking, andengageindoingthis.

G
overnance issues have come to
the fore, this time on a wider can-
vasfollowingtheglobalfinancial
upsetthroughthe‘housingpricebubble’
intheUSin2007.Abankforinternation-
al settlements report says investors lost
$550 trillion, the difference between the
‘disclosed value of securitized assets’ of
$592 trillion and the ‘real value’ of the
same at $34 trillion. This eroded confi-
dencewithinthefinancialsector,among
investors and in the global financial
economy which in turn gave rise to the
great recession 2007-2009. Responsible
for this were the failure of corporate
governance in the too-large-to-fail enti-
ties like Lehman Brothers; failure of
regulatory governance and a cata-
strophic failure of business
ethics,probityandfinancialac-
countability.ThentheSatyam
episode happened within the
Indian shores making the In-
dian corporate sector sit up
withgapingeyes.
These and such develop-
ments time and again re-em-
phasisetheroleof governance
professionals like company
EXPRESS PHOTO
secretaries, accountants,
chairpersons, regulators, lawyers, law
administrators, forensic accounting ex-
perts and so forth. Governance leader-
ship is widely apart in its role and
importance as compared to corporate
executive leadership. Governance lead-
ership is long term in perspective, ethi-
cal and perspicacious. It guides and lays
thepathforexecutiveleadershiptotread
upon in achieving good corporate per-
formance all through and all along. The
company secretary, for example, having
the comprehensive view of the board-
room and being a part and parcel of the
executiveleadershipalongwiththeCEO
and the CFO, is the link between gover-
nance leadership and executive leader-
ship. The version of the profession that
engages in public practice performs the
same role as an independent and arm’s-
length yet indispensable governance
professional at par with the other gover-
nanceprofessionals.
Executive leadership busies itself
with corporate performance within the
policycontoursof goodgovernance.Gov-
ernance leadership’s performance con-
sists in ensuring longevity of corporate
existence as a stakeholder-centric insti-
tution. After the calamities of Lehman
crisis, the need for continuous strength-
ening governance professionalism has
become the call of the time. Grooming
Governance issues no longer
restrict themselves to national
boundaries. Governance
performance across the world,
regulatory governance of
international capital flows and
financial transactions,
governance of multi-national
corporations, cross-border
acquisitions and takeovers and
insolvencies have all assumed
tremendous importance
them as ethics leaders, expert corporate
compliance managers, legal luminaries,
financial and accounting experts, corpo-
rate visionaries, the governing bodies
may also imbibe the culture of business
ethics, financial accountability, probity
and communication transparency
among professional members. Realizing
capital market regulation and corporate
governance in large as well as micro,
small and medium enterprises, the pro-
fessions should devise, launch and con-
duct corporate governance research and
training programmes for making their
members as well as corporate directors
truegovernanceprofessionals.
Governance issues no longer restrict
themselvestonationalboundaries. Gov-
ernance performance across the world,
regulatorygovernanceof international
capitalflowsandfinancialtransactions,
governance of multi-national corpora-
tions, cross-border acquisitions and
takeovers and insolvencies have all as-
sumedtremendousimportance.
In light of the Satyam episode, the In-
dian premier professional institutes
need to collaborate to frame appropri-
ate, intelligible and communicative fi-
nancial and non-financial disclosure
standards in the interest of the in-
vestors.Governance,bettergovernance
and continuing excellence in gover-
nance performance can come only
through sustained education, training,
development and exposure of the vari-
ous governance professionals to intri-
cate governance leadership issues. The
The entire society holds stake in good
corporate governance and regulatory
reliability yet the need for practical
training and inculcation of good gover-
nance principles never came to the fore
as vehemently and prominently as after
the 2007 crisis. International financial
regulation demands a new and robust
framework. Central banks need to en-
sure price as well as financial stability.
Governanceprofessionalshaveabigrole
in this. They need to become proactive.
Governance is more easily talked about
than practiced. Most under-researched
and least understood, corporate gover-
nanceneedstoinstitutionaliseitself asa
widespread creed. Professional insti-
tutes have a larger responsibility to
shoulder in the education, research and
traininginthisregard.
The author is secretary & CEO, institute
of companysecretariesof India
This is the second of a 5 part series on how
education for a business, legal, chartered
& cost and works accounting, and compa-
ny secretary career can be more applica-
tion focused to avoid debacles such as
SatyamandLehmanBrothers.

CAMPUS OF THE WEEK NATIONAL INSTITUTE OF INDUSTRIAL ENGINEERING, MUMBAI

THEME OF THE WEEK An intelligent redistribution of funds is important and if
NEED FOR BRINGING PRIVATE CAPITAL TO FINANCE HIGHER EDUCATION? not done properly, the chasm between professional and
non-professional courses will continue to grow
KVasanthKumar ventures. In other words, private sec-
tor will be interested in financing tech

fe@campus is a platform for
young scholars from the best
academic institutes in India to
share their point of view on
business trends and public policy.
Keeping the same in mind we put
forth for this week the topic ‘Need
for bringing private capital to
finance higher education’.
Students from NITIE Mumbai
responded enthusiastically
sending us a set of essays that
displayed their intellect,
understanding and articulation,
which in turn made our task of
choosing the best, interestingly
difficult. Here are the two
adjudged the best among an
informed group of students.
A sustainable socio-economic policy should be the guideline for private funded institutions. Easy availability of loans
through banks, micro-credit etc is the only means to strike that balance
DhirajM
AdministrativebuildingatNITIE,whichwasestablishedin1963andislocatedinMumbai’sViharlake
our government agencies alone. Gov-
ernment funding is limited due to com-
etc. The benefits of private capital are
seen already with institutes like Sym-
eas and more than 40% in poverty, any
educationprogrammehastobeframed
E
DUCATIONsector,likeanyoth- schools and business schools only.
er in India, invariably stares at This is evident from the sheer growth
the same horizon—one billion of private engineering and manage-
people and counting! When exploiting ment colleges in India. Here two ways
economies of scale is one side of the of bringing in private capital exist—
coin, the myriad challenges faced in settingupcolleges,bringingalternate
reaching the masses becomes the oth- revenue stream for government col-
er daunting side of the same coin. Be- leges by way of consultancy and train-
foreattemptingtoanswerthequestion ing programmes. The government
posed, let us define the boundaries of should strongly encourage the latter
the playground. For the sake of this and undertake a regulatory role for
analysis, any kind of formal educa- the former. This would both decrease
tion undertaken after 12 years of the stress on the government and en-
schooling has been considered as sure availability of quality education.
‘highereducation’.Theever-risingap- The government should consider
plicants/intake ratio in all the top- the extra funding thus generated as
notch institutions of India has savings and reinvest these savings in
indicatedtheclearinabilityof thegov-
ernment to provide quality higher ed-
ucation. Can the time-tested solution
called privatisation be applied to edu-
cation sector? Probably yes, but only
incertainpockets.
If we look at our government’s
spending pattern towards education,
lion’sshareisallocatedtothetopinsti-
tutions offering professional courses
such as engineering and manage-
ment, majority being government in-
stitutions. Other disciplines such as

T
HE topic assumes much rele-
vance in the wake of premier in-
stitutes like MIT, Wharton
planning to start satellite campuses in
India. Private capital in higher educa-
tion has been on the rise over the past
decade. The fundamental reason for
the necessity of private capital in the
educational sector is the mismatch be-
tweendemandandsupplyinqualityed-
ucation that cannot be avoided.
Talking from an Indian perspective, it
is hard to find any other institutes like
IITs,whichofferworldclasseducation.
The government has its limitations on
the spending in education and com-
pared to most of the countries the per-
centage of budget allocated for
education is on the lower side for India.
Raising the quality of higher educa-
tion to global standards in terms of the
quality of education, infrastructure
etc would require a huge quantum of
funding, which cannot be achieved by
peting demands from other sectors
such as agriculture, housing, trans-
portation, and health care. Some mea-
sures that have come into place include
cost sharing, public-private partner-
ships, commercialisation of research
biosis, BITS Pilani etc setting new
benchmarks in management and engi-
neering streams. A huge influx of pri-
vate capital is taking place as the
opportunity in this sector is tremen-
dous. IIITs across the nation that start-
ed with a business model of
public-private partnerships are testi-
mony to the success in this regard. A
countrylikeIndiahasitsstrengthinits
citizens and to continue gaining mo-
mentum in the ladder of growth, quali-
ty higher education is a necessity and
this can be ensured only by private cap-
italplayingmorerolesinhighereduca-
tion.Privateloansarenowavailablefor
people across all strata to fund their
highereducation.
Sourcing of private funds to finance
education sector can do wonders, but
the question is how well these facilitat-
ed educational programmes will find
its way to the common man. With more
than 70% of our population in rural ar-
with this huge segment in the fray.
More private capital would definitely
lead to higher fees, which would lead to
escalation of the cost of higher educa-
tion.Thiswouldcatapulthighereduca-
tion away from the reach of many a
deserving candidates. Thus a sustain-
able socio-economic policy should be
the guideline for private funded insti-
tutions. Easy availability of loans
through banks, micro-credit etc is the
only means to strike that balance. Gov-
ernment should step in through part-
nerships with institutions and banks
to ensure that the educational sector is
regulatedandmonitoredpartially.
One thing is for sure; prepare your-
self toaccepttheinevitabletruthonthe
increased role of private capital in
highereducationinIndia!
The author is from the 2010 manage-
mentbatchof NITIEandcanbereached
atmdhiraj@gmail.com
arts and sciences receive very little
funding from the government that
they can even be termed neglected.
But it is a fact that no country can sur-
vive with engineers and managers
alone, whatever their levels of compe-
tence may be. A developing country
like India needs scientists, lawyers,
farmers, artists and philosophers in
same numbers as engineers and man-
agers. It is time for the government to
seriously concentrate upon hitherto
neglected disciplines and lend them a
helpinghand.
In order to do that, the government
simply cannot redistribute the alloca-
tion of funds because it will stall the
development of top institutions that
can be detrimental to the nation build-
ingprocess.So,thereisaclearneedfor
generation of extra funds and this is
where the private sector can pitch in.
But the problem is private sector is in-
terested only in commercially viable
buildingastrongartsandsciencebase
because at this moment it is these
courses that need utmost attention.
There is a need for extra funding in
these sectors whereas the funding can
be generated only through profession-
al courses sector. Thus there is a need
for bringing private capital to finance
higher education but what is more im-
portant is an intelligent redistribu-
tion of funds. If the redistribution is
not proper, the chasm between profes-
sional and non-professional courses
will continue to grow which is not a
goodsignfortomorrow’sIndia.
The author is from the 2010 manage-
ment batch of NITIE and can be
reached at k.vasanth.kumar86@
gmail.com

NEWS REVIEW

CAMPUS ROUNDUP INTERNATIONAL SCHOLARSHIPS

● FMS
Over 200 students from FMS Delhi’s north
and south campus get summer jobs
OVER 200 first-year students from
Faculty of Management Studies north
and south campus in Delhi completed the
summer internship process last week. A
total of 84 companies participated in the
process. Top recruiters included Unicon
who hired 8, Hindustan Unilever Limited
hired 6 and Citibank hired 5 interns. Other
recruiters included P&G, Citibank,
Standard Chartered and HSBC. 31 new
companies participated in the process
including finance companies such as
Lazard Group, JP Morgan, Nomura
Services, Fullerton Securities and
marketing companies were PVR,
Kellogg’s and Astra Zeneca. Pharma and
media & advertising were popular
sectors on campus. Average stipend
offered was Rs 30,000 with the highest
domestic stipend was Rs 1 lakh and
international stipend at $2400.
● IIMLucknow
IIML’s 6-month management programme
for defence officers commences
IIM L started its 24-week general
management programme, the seventh in
a series of such programmes, for 32
defence officers who have left or are
about to leave the services, voluntarily or
because of retirement. The aim of the
programme is to help officers transition
their skills to suit the corporate world’s
requirements. The six-month crash
course packs in 30 modules of 15 hours
each giving participants a basic
understanding of managerial systems.
The programme has been designed to
provide defence officers basic functional
inputs in subjects such as accounting and
finance, decision sciences,
organisational behaviour, human
resources management, communication
skills, marketing, strategy, information
technology and business environment.
The cost of the programme is borne in
BITSstudentstakingpartin2009Save
WaterSaveElectricityMarathon
part by the officers and in part by the
defence ministry.
● BITS Pilani
BITS Pilani reports positive wave in final
placements for grads and post-grads
Birla Institute of Technology and
Science (BITS) reported that its
campuses, both in Pilani and in Goa, that
produce 1,700 graduates and
postgraduates every year have done
better this year in placements as
compared to last year. The institute
reported almost 100% placement within
the electrical, electronics, mechanical
and computer science stream. Salary
range was between Rs 5 to Rs 7.5 lakh
with the highest offer on campus at Rs 14
lakh per annum. Largest recruiters were
BHEL, NTPC and HCL, who cumulatively
made 240 offers. Companies such as
Amazon, Credit Suisse, Royal Dutch Shell,
Exxon Mobile also visited for placements.
This year student preferences have been
in core companies in sciences,
engineering, pharmacy and management
rather than IT companies.
We invite colleges and universities to
send in information, for this section, on
new faculty and courses, international
alliances, industry projects and other
current events to
fecampusroundup@expressindia.com
Institute of Humane Studies, Virginia
IHS is offering a summer graduate
research fellowship programme that
begins in June 2010 on the classical
liberal tradition. The programme
includes a $3,000 stipend, travel and
local housing, two interdisciplinary
seminars and guidance. Deadline:
February 2. www.TheIHS.org/SuRF
Saint Joseph’s University, Pennsylvania
SJU is a catholic, Jesuit University
offering liberal arts programmes.
Students are considered for merit-based
scholarships. Students in the Asia-
Pacific region who are admitted prior to
February 1, 2010, can contest in an essay
writing competition for full or partial
tuition scholarship at the US embassy in
Singapore. rachel.johnson@sju.edu
Harvard University, Massachusetts
The sustainability science programme at
Harvard University’s centre for
international development invites
applications for resident fellowships for
the academic year, September 2010. It is
open to doctoral, post-doctoral
students, and to mid-career
professionals engaged in research or
practice to facilitate the design and
implementation of interventions that
promote sustainable development.
Application deadline: December 1, 2009.
http://www.cid.harvard.edu/sustsci
Wellesley College, Massachusetts
The Susan and Donald Newhouse Centre
for Humanities at Wellesley College
announces resident fellowships for
academic year 2010-11, including
stipends of $50,000 and up to $3,000 in
research support. Application deadline:
December 1, 2009. www.Wellesley.edu
Source: www.educationusa.state.gov
For information on higher education in
the US visit http://www.usief.org.in