CHAPTER 3 Companies, Boardroom and Transparency In 2003, the documentary film The Corporation was released. Interestingly, it was written by a law professor, Joel Bakan, from the University of British Columbia, Canada. It was very well received by the public and was also nominated for several international awards. While the documentary was being filmed, Bakan also wrote the book The Corporation: The Pathological Pursuit of Profit and Power. Directed by Mark Achbar and Jennifer Abbott, the documentary was about the progression of a modern business corporation from a nondescript, simple legal entity to a legal person. Today, corporations enjoy most of the legal rights of a person. The documentary ‘discussed the rights of a corporation based on the Fourteenth Amendment to the United States Constitution. The Fourteenth Amendment was adopted in 1868 and addressed the issues of citizenship rights and equal protection of laws after the American Civil War. The first section of this amendment includes several importantBusiness Law for Managers clauses related to citizenship, privileges or immunities, due process and equal protection. This is one df the most contentious parts of the American Constitution and has resulted in several landmark judgments, such as the Brown v. Board of Education regarding racial segregation in 1954, Roe v. Wade regarding abortion in 1973, Bush v. Gore regarding the presidential election in 2000, and Obergefell v. Hodges regarding same-sex marriage in 2015. Corporations-were treated as persons as a result of an 1886 US Supreme Court judgment, Santa Clara County v. Southern Pacific Railroad Co.' Reportedly, this was the first case in which the Supreme Court had held that the Fourteenth Amendment’s equal protection clause was applicable to corporations as well. So all constitutional protections guaranteed to natural persons applied to corporations as well. The documentary film inter alia included exposure of a corporate plot against the American president, suppression of investigative news reports due to corporate influence, repercussions of the privatization of the municipal water supply in Bolivia, corporate social responsibility, limited liability, and the never-ending debate over a company as a distinct legal entity. It also brought to the attention of the viewers issues related to specific debates over the labelling of a corporate as a psychopath. TATA SONS’ AMENDED AOA Let’s take a break now and go back to our friends, the 3 Aces. Companies, Boardroom and Transparency In September 2017, Akmal read in the newspaper that Tata Sons wanted to modify its Articles of Association (AoA) and that there was strong opposition from the Cyrus Mistry camp. Since he was meeting Albert for lunch, he decided to discuss it with him. This is how their conversation went: Akmal: ‘Hi, Albert! What is all this fuss over AoA?’ Albert: ‘See, Akmal, the AoA of a company is an integral document that tells the world how the company will be managed internally. It is submitted to the Registrar of Companies at the time of the company’s inception. It can in no way contradict or exceed the limit set by the Memorandum of Association (MoA).’ Akmal: ‘Now, what is an MoA?’ Albert: ‘The Memorandum of Association of a company tells the purpose for which the company has been incorporated. It is stated in the ‘objects’ clause, which contains the core and non-core objects. MoA describes the primary purpose and might include acts that are either essential or incidental for the attainment of the primary purpose, even if they are not included in the objects clause. Practically, a number of related, and sometimes unrelated, activities are included in the ‘other objects’. MoA is the most important document that unequivocally states the purpose of the formation of the company and its relationship with the external world. All activities envisaged by the company must be within the legal framework as defined by the law of the land in general and the law governing the companies in particular.’Business Law for Managers ots With this brief understanding of the MoA and the AoA, it is interesting to note how companies operate in different legal environments to survive and thrive. TATA V. MISTRY: BOARDROOM BATTLE The last week of October 2016 was the corporate tsunami week in India. On 24 October, the entire country was talking about the replacement of Cyrus Mistry as the chairman of Tata’Sons, the holding company of the huge Tata business empire. There were no reasons given by the board of directors. Speculation was rife. News channels reported that Mistry was planning legal action. A few days later, the Tatas broke the silence and said that Mistry was replaced as he had deviated from the company’s long-established traditions and ethical norms. These were heavy words and could be interpreted in more than one way. At that time, it was not clear as to what the future course of action would have been—a full-fledged legal war, negotiation and settlement, third-party mediation, or something else? Later, a mix of all these happened, but the matter could not be resolved amicably. Now, in order to understand the situation better, let us get our basics of corporate governance right. A company is a distinct legal entity and takes birth when registered according to the law of the land—in this case, the Indian law. A company can be formed only for conducting lawful activities. It is inanimate and all the decisions for the company are made by individuals, who at the topmost level comprise the | Companies, Boardroom and Transparency board of directors, headed by an individual called the chairman. The chairman holds the position as long as the board has trust, faith and confidence in him. He cannot make decisions without the members’ consent and on his own. In cases of expediency or contingency, if he does have to take any decision, it must be ratified later by the board. Hence, legally speaking, there is hardly anything that a chairman can do without the approval of the board. Typically, the board in any company does not get involved in the day-to-day matters and leaves or rather delegates that work to the executive body. This may be headed by an executive chairman or managing director, or the general manager. The boards are more interested in policymaking and strategic matters and usually meet at regular intervals to deliberate on the same. However, the boards may question the working of the executive body if certain decisions are made by deviating from the path laid down by the board, or if it transgresses the invisible but clearly understood line drawn by the board. Decision- making is complex, difficult to judge and depends on how the discretionary power is exercised. Collective decision-making—whether in the board room or in any committee or anywhere else—normally characterizes that ‘all swim and sink together’. It doesn’t matter if the decision was made unanimously or by secret voting. What matters is that it is the decision of the group; the outside world is not supposed to know what happened inside. The world gets to know only that which is communicated through the minutes of the meeting. Hence, if any of the directors is uncomfortable with theBusiness Law for Managers group’s decision, he may try to convince them otherwise, or he may get his dissent recorded in the minutes of the meeting, or resign. Mistry was a board member for over a decade. He was an equal partner in all the decisions made, many of which he has been questioning now. If he did not agree with the decisions made, he could have resigned a long time ago. But he chose to willingly continue as a ‘powerless’—in his own words—chairman. He might not have anticipaféd that he would be booted out of his position. The present situation in which he finds himself is of his own making. A lot depends on the managerial style of the business leaders and how ethically they would like to conduct the proceedings in a company. Intra-company transactions should be according to the Articles of Association and the Memorandum of Association of the company. Also, the transactions of the company with the external world are reflective of the culture prevailing in the company, and how it would like to adhere to the norms of corporate governance, written or unwritten. At times, it is important for the company to pay attention to the unstated norms that are in line with its philosophy, or, might be deviating from the standard operating procedure of the company. The corporate leaders should try to get the external norms aligned with what the company practises; however, it is much easier and also prudent to align the - corporate functioning with the set norms of the business environment. The law in India for companies underwent a massive change in 2013. Companies, Boardroom and Transparency NEW LAW FOR COMPANIES: NEW HOPE, GREAT EXPECTATIONS, 2013 A company is a fantastic vehicle for doing business since it is a distinct legal entity, separate from the promoters and the directors, and the final responsibility of a company’s actions lies with it and not with the persons who made those decisions. This is the classic position of ~ a company and has been upheld in several judgments by different courts. But this basic and essential characteristic of acompany has often been misused. Several courts have been compelled to lift the corporate veil to reveal how decisions are made—whether the company is responsible for it or a group of individuals. Corporate governance has typically been a very ticklish issue, particularly due to decision-making by the board of directors—which works on the basic assumption that the board sinks or swims together. Indian companies have been governed by a law that was enacted in 1956 and has been the target of criticism and ridicule—in good measure, specifically due to ambiguity and prolixity—for a very long time. Eminent jurists, captains of industry, regulators, taxation’ experts, consultants, chartered accountants, company secretaries, and many others have been vehemently arguing for the law to be updated to keep pace with the times. For several decades a number of committees have been constituted to look into different aspects of corporate governance, notably on transparency and accountability. However, for one reason or another, no major changes have been made. Things have remained the same. TheBusiness Law for Managers few changes that have been made proved to be neither effective nor long-lasting. There were several loopholes, and unscrupulous men devised many a way to exploit them, defeating the purpose of making any amendment. But in 2013, major changes were made. The new law aims to ensure more accountability, transparency and care for society—corporate social responsibility. Under this law, there is a simpler procedure for starting and winding up a business, and easier and simpler methods for mergers, acquisitions and amalgamations;. even a lone person can start a company. There are also some checks proposed on auditors—a lesson derived from the Satyam fiasco. A ‘cozy relationship between promoters, directors and auditors of a company is troubling and can cause a lot of problem for regulators and the other law- enforcing agencies. There is a provision for class-action suits by depositors, which will really be music to the ears of lawyers, but as there is no system of contingency fee in India, it cannot really work. However, it will still prove to be a deterrent. To be realistic, one should not expect the kind of shareholder activism and depositor activism as is observed in Western jurisdictions, particularly in the United States. The new law has also enhanced the role and number of independent directors. But as of now there are doubts and apprehensions as to whether independent directors will really be able to muster enough courage to have a say say in the proceedings of a company. It is jokingly said that there cannot be an independent director—either the person can be independent, or he can be a director. The fact of the matter is that it depends on the individual who Companies, Boardroom and Transparency accepts the position of being an independent director. Some of them, as is well-known, accept these only as decorative positions, which is mutually beneficial for the company and the individual. The trend must change but the new law may not be the best way to achieve this. It requires a change in the mindset of the people in the business fraternity and the availability of ‘suitable persons to take up the position of independent directors in a number of companies. The new law has made it mandatory for most companies to spend a certain amount of money—2 per cent of profits—on corporate social responsibility, which technically and legally is a huge sum of money to spend on society. The pertinent question in these circumstances is what is corporate social responsibility? It is equally important that this amount is not used for anything else. Dubious NGOs, often managed by the kith and kin of those in power, frequently become the beneficiaries of this 2 per cent; it is also possible that a lot of work paid with this 2 per cent goes in the shape of petty contracts to a number of agencies indirectly controlled by political masters. ' A system is as good as the people who make it work. Merely changing the law might not work. Strict enforcement and the creation of trust and confidence will go a long way in setting up the proper legal environment for doing business. Certain business leaders take pride in moulding the political environment according to the needs of their companies. Surprisingly, such tendencies are exhibited even in some of the so-called highly strict and disciplinedBusiness Law for Managers business environments. One of the examples is that of the political class in South Korea and the huge conglomérate Samsung. HORSE TRADING, SAMSUNG STYLE In August 2017, Samsung’s de facto boss, Lee Jae-yong, was held guilty of bribing government officials and their confidantes for getting approvals favouring the company and tweaking different government policies at different times to suit the company’s interests. Lee had gifted the finest breed of horses to a close confidante of the then South Korean president, Park Geun-hye. The former president is in prison herself after being impeached by the Constitutional Court of South Korea in March 2017. The confidante’s daughter was an equestrian and had a fondness for good horses. Samsung, as a South Korean conglomerate, has for the last several decades benefited from favourable government policies. Its bosses never bothered to be on the right side of the law because they knew that the political system would never fail them—it hadn’t when they were caught red-handed and duly convicted and sentenced by the courts. Presidential pardons for economic offences have not been uncommon in South Korea, and Samsung, along with many other companies, received a lot of such pardons. A highly business- friendly prison system that allowed prisoners to conduct meetings from their cells was also helpful. The case of Sahara Group’s Subrata Roy was similar, but the number of such meetings and the implications for the Companies, Boardroom and Transparency group companies weren’t anywhere close to what was witnessed in South Korea. It has been widely reported that Chey Tae-won, the top boss of the SK Group of companies in South Korea, had nearly 1800 visitors in the 500 days that he spent in jail, which was way above the permitted number of visitors according to jail regulations. Such was the ease of doing business and a hassle-free jail term that the company opened an office near the prison to facilitate visitors’ meeting with the convicted boss and to take care of other issues. When the prison cell can be one’s corner office, what is the need to hurry back to the company’s headquarters? ‘ Reportedly, since the new president took over in March 2017, things have taken a turn towards a stricter enforcement of the rule of law. After all, a jail is a jail and no one should be allowed to take their sentences lightly. There is a purpose in imprisoning a person—whichever theory of punishment, retributive or reformative, is to be considered—and the jail term should not be seen as a fun-filled time. There has to be a certain sense of shame, humiliation and mortification attached to being imprisoned. Issues of corporate governance—which are not restricted only to intra-company affairs but can easily extend and extrapolate to the business relationship with government, regulators, public, other stakeholders, -etc.—are being tackled in a different manner in different jurisdictions. However, the need for transparency and accountability is usually being emphasized in evolved and evolving economies. South Korea can safely be consideredBusiness Law for Managers a developed economy, but with a lower level of legal and regulatory oversee and control. This must change’if the country wishes to command international respect. The same applies to India. Though the Indian legal system, thankfully, does not provide for presidential pardon for economic offences, we have often heard about horse-trading in the political arena and one can never — deny the fact that ‘horses’ may be playing an important role in getting deals done at farmhouses away from the hullabaloo of cities. Surprisingly, such business lobbying and hobnobbing — with the political masters have been prevalent in South Korea, but the country has also evolved in the last several decades and punished leaders for having extra cozy relationships with business persons. This is still to be witnessed in India, which, despite having one of the most vibrant democratic processes in the world, sometimes — finds itself turning a blind eye to obvious ‘mutually beneficial relationships between the political class and corporate leaders. SOUTH KOREA: EVOLUTION OF DEMOCRACY AND LESSONS FOR INDIA In March 2017, the Constitutional Court of South Korea in Seoul upheld the impeachment of President Park Geun- hye. She was the first democratically elected president of South Korea to be impeached. The legislative body had impeached her in December 2016. The Constitutional Court in a unanimous decision of eight justices held her , guilty of committing ‘acts that violated the Constitution Companies, Boardroom and Transparency and laws’. It was also held that her acts ‘betrayed the ~~ trust of the people and were of the kind that cannot be tolerated for the sake of protecting the Constitution’. Strong words, indeed! There have been serious allegations against her for misusing her position and indulging in corrupt practices. She will soon, in all probability, be prosecuted for collecting tonnes of money through bribes routed through her friend Choi Soon-sil from business companies— Samsung being the most talked about. The Park—-Choi duo reminds us in the Indian context of Jayalalitha and her trusted aide, Sasikala, in Tamil Nadu. One could only wish that the Supreme Court of India’s decision had been pronounced a bit earlier— during the lifetime of Jayalalitha—so that the nation could have been saved from the ignominy of the Indian flag adorning the mortal remains of a guilty person. Better late than never! At least for Sasikala, the courts took the long story to a logical conclusion. The law took its own course. In South Korea, the decision came fast and along with political ramifications for legislators and the country. Corporate bodies were put on high alert. Even prior to the court’s decision, Samsung was facing graft allegations with Lee Jae-yong being tried. South Korea is known for its chaebols, which are conglomerates of small businesses and manufacturing units. The scale of economies can be witnessed in a most practical way in these chaebols that control more than half of the businesses in South Korea and provide bread and butter to a million people. Lee’s trial is being termed as the trial of the century, at least forBusiness Law for Managers South Korea, as many skeletons could come out of the _ cupboard. About two decades ago, the Asian financial crisis in _ 1997 had affected South Korea as well. It was around that _ time that Indian consumers had started getting a glimpse _ of South Korean engineering marvels, thanks to the economic liberalization of 1991. Indian consumers were completely at sea to understand the South Korean debacle, After all it was only a few years ago that they had started _ getting familiar with Korean expertise—Daewoo’s cars, _ Cielo and Matiz, Samsung, LG Electronics, Hyundai’s | Santro and a few other companies had opened shop in India to tap into its large market. But then, South Korea _ had become bankrupt. It was by far the most important _ victim of the turmoil in Asian financial markets. At that time, it was not just the world’s eleventh largest economy and the first major developing country to | graduate to the Organisation for Economic Cooperation and Development (OECD) status but also held out by economists and international financial institutions as the ideal model for all developing countries to follow. However, when Seoul was forced to approach the IMF, { the US and Japan for emergency assistance on a massive scale, the world asked how the ‘Korean way’ could have gone wrong. We stand at the same crossroads today. Is the South Korean business model worth emulating? Indian consumers and policymakers are perplexed. But, one thing is certain: democracy has evolved in South Korea and the balance of power between the legislature, executive and | judiciary is surely working well. ‘Companies, Boardroom and Transparency Companies are managed by individuals who are constantly under the hawkish eyes of financial regulators in most evolved business environments in the wore Arguably, the US provides one of the most evolve business environments with ample checks and balances from all quarters, whether it is the legislative, the executive, the judiciary, the regulators, the investors, . the customers or the public. In such a scenario, it is quite obvious that a top business person making decisions for the company will be under public scrutiny and will not be permitted by the law to work against the interests of the company. The shareholders of the company may or may not raise their voices at the relevant time. However, the role of the financial regulator is to ensure that the promoters, the directors, and the managers of the company do not work against public interest or the interests of the company. At times, there might be a tussle between the financial regulator and the judiciary. Something similar happened in the US in the past decade. DISGORGEMENT, FINANCIAL REGULATOR, AND LEGAL AUTHORITY A curious case was heard by the US Supreme Court in April 2017. What was more important and which should prevail—unjust enrichment or business certainty? This was regarding a disgorgement action by the Securities and Exchange Commission, or the SEC, (the American equivalent of Sebi) against a business person named Kokesh for committing a securities fraud in 1995.Business Law for Managers Companies, Boardroom and Transparency case. There has been concern over the power of the US government and the SEC to impose penalty—any amount, any time and in any manner. Chief Justice John Roberts cited an observation made by the then Chief Justice, John Marshall, almost two centuries ago, calling the government’s limitless power to impose penalties ‘utterly repugnant’. Roberts further expressed concern over the manner in which the entire scheme had been devised by the government itself. To ensure transparency and accountability, the system should ensure that reasonableness of limitation and fairness in procedure are maintained. Businesses in the United States are highly critical of the SEC’s actions as these bring in avoidable uncertainty in their plans, forcing them to be always on tenterhooks. This results in a conservative approach by business persons, with the sword of investigation over past actions constantly dangling above them. The justices in the Supreme Court have not been sympathetic with businesses because of this reason. However, they have forcibly questioned ‘SEC’s action with respect to the statutory requirement, which sort of imposes the limitation of five years. The government has argued that the amount disgorged was not a penalty but a fair remedy, essential to ensure equity and justice. How can any person or firm be allowed by law to retain the sum of money acquired through illegal means? Bridging the gap between law and justice requires judges to walk the extra mile and interpret the existing legislation in a manner that does not nullify the real purpose. Being too technical in interpreting the SEC legislation to favour businesses will not serve the SEC filed a claim in 2009, almost fourteen years — later. And although the statute of limitation réstricts ‘ the recovery of amount to five years from the date of — filing, SEC ordered Kokesh to repay about $2.4 million as penalty and about $35 million as disgorgement. 4 What is disgorgement? Disgorgement is a remedy and not a punishment. The — purpose of disgorgement is to prevent unjust enrichment — and is compelled either by courts or institutions with | legal authority. The guilty are forced to pay back ill- gotten gains, which might have been amassed by illegal, © unethical or wrongful conduct. The next question that arises is till how long can a person be asked to pay back _ the booty? This is extremely important and relevant in — the Indian context as well, where action against corrupt | politicians, bureaucrats and business persons is taken decades after the misconduct has been done. ; The application of law is based on reasonableness and it presupposes conclusivity and closure after a certain period of time. Depending on the seriousness of the issue and its potential to impact further activities, a limitation — period, known as the law of limitation, is usually — stipulated in almost all evolved jurisdictions. At times, | specific statutes also mention a time period after which | no action can ordinarily be taken. However, the courts are usually provided with the power of condoning the delay, — depending on its nature and reason, in exceptional cases. The issue of limitation is critical in determining | the legal validity of the action of disgorgement in this —Business Law for Managers purpose. What is really needed is an amendment to make — the law effective and vital. Similarly, courts im India and other institutions, including the financial regulator, must not let the black-letter law defeat their spirit. We, in India, urgently need a cleanliness drive to cleanse the | system of unscrupulous individuals and organizations | taking shelter under the cloak of the written word. On 5 June 2017, when the US Supreme Court decided _ the matter, it interpreted the SEC disgorgement as a penalty and ruled that the commission should have stuck to the statute of limitation. It was made clear that the financial regulator could not sleep over the matter and _ initiate proceedings at any time at its own sweet will. | Until and unless there were compelling circumstances, the courts generally would not allow the bypassing of — limitation requirements. j But this in no way means that business persons — should become complacent in case no action is taken by the financial regulator or other enforcement agencies. It _ is the bounden duty of business managers to not just be legal but also ethical in their transactions, particularly — when they’re ot dealing with their personal property but making decisions for the company. ’ Forexample, should Infosys, oneofthe biggest software _ companies in the country, make its dealings completely — transparent? This question has troubled a good number _ of corporate leaders and business commentators. Legal i experts have different views on this matter. However, — there is unanimity on the fact that any corporate manager _ and leader is ultimately responsible for the decisions of the company and must act in its interest. This is highly ‘ Companies, Boardroom and Transparency subjective and can only be explained with reference to the context in which a particular company is operating. Time, place, actors involved, exigency if any, the vision and mission of the company, its unstated philosophy, unwritten norms, an anticipated opportunity or threat, etc., determine the context in which one can interpret whether the business managers have been acting in the interest of the company or not. There can, of course, be a difference of opinion among practitioners. TRANSPARENCY, INFOSYS AND CORPORATE GOVERNANCE The Panaya investigation was started on the complaints of an anonymous whistle-blower alleging serious acts of omission and commission by former chief financial officer (CFO) Rajiv Bansal and the CEO at that time, Vishal Sikka. In July-August 2017, Infosys refused to disclose the full report of the investigation done by an American law firm. This was in response to a demand made by Narayana Murthy, one of the most important founders of the company and now a minority shareholder. By no means was his demand churlish, however, the manner in which the company’s current management decided to handle it left many questions unanswered and plausible doubts in the minds of shareholders and investors alike. High corporate governance norms, whether written or unwritten, coded or simply followed without any documentary existence, require the utmost and untiring effort of individuals managing the show at the topBusiness Law for Managers level to allay all doubts in the minds of stakeholders, By refusing to disclose the investigation report fully, one unnecessarily sows the seeds of suspicion. This is surely avoidable in times of instant and widespread communication, primarily with the help of social media and the formal print and electronic media. What is so sacrosanct and secretive about an investigation report? The Panaya investigation was not conducted by any statutory authority and the report is not shrouded in secrecy due to the provisions of any law. As a matter of convenience, and as is the general practice in the corporate world, any allegation regarding the breach of governance norms is first investigated by an internal committee and thereafter by a supposedly neutral and independent professional organization. In this case, law firm Gibson Dunn and global risk consultancy and investigations firm Control Risks are involved. Both of them do not have any statutory status but command a good position and respect among similar firms globally. They are bound by the confidentiality clause of the contract between them and their client, Infosys in this case, Hence, the firms themselves cannot disclose anything. Fair enough. But why is Infosys being so secretive? Shareholders have every right to know the full report. This is even more glaring in the light that Infosys’ founder promoters never left a stone unturned to establish extremely high standards of probity, especially during a time when corporate governance norms and stipulations . by financial and other regulators were either very light or Companies, Boardroom and Transparency totally absent. If in those times almost everything was shared with the stakeholders, then it is indeed surprising and shocking that a report which is the result of an investigation of certain very serious allegations against the top management, including the chairman, is not being made public. As mentioned earlier, it is impractical for a company to disclose all confidential information, which is known only among the most senior members. Whatever transpires inside the board room is not to be reported verbatim in the minutes of the meeting. Often, there are documents prepared after due deliberation between the members and only the operative portion is shared. Given that the Right to Information has enabled individuals to demand answers from the government, public sector companies and almost any other organization within the ambit of the definition of ‘state’ in Article 12 of the Constitution, a similar report in a public sector company would have been, undoubtedly, made public. It would have been dissected by almost every news channel and reams of paper have been devoted to it. But a private company has the privilege of anonymity, and Infosys is using this provision of law to its advantage. Propriety demands that the air should be cleared. Business leaders, in the fitness of things, try to communicate directly with the shareholders and also in a larger sense to the stakeholders in a free and fair manner. Such communication need not be a one-way process as a true business manager must take proper feedback from the other party and incorporate it in the decision-making process of the company. No reasonable and prudentBusiness Law for Managers person will argue that every action of the company must be transparent. However, certain important matters need to be dealt with in a tactful manner so that there is more openness and less opacity regarding the processes followed. TAKEAWAY FOR MANAGERS > As a company is a distinct legal entity, business managers must be careful enough to make decisions in the interest of the company. > At times it may be quite tempting for business leaders to bypass the well-established decision-making process typically followed in the company either due to urgency or a lack of confidence in getting the proposal approved. However, in the long run it is prudent for business leaders to be patient and persistent and not circumvent the set methods. > The legal environment of a jurisdiction determines how a company would like to function—according to strict legality or blending ethics and law judiciously— but business managers may do well not to transcend the thin dividing line between the politically doable and undoable things. > Ina democratic set-up, public interest is paramount, and managers must avoid bringing their company’s interest in conflict with that of the public at large. Ideally, both must be aligned. If that is not possible, the deviation must be as small as possible. Companies, Boardroom and Transparency Corporate-governance norms, — including the companies law, in any jurisdiction are dynamic in nature and managers must update themselves frequently to be in sync with the current scenario.