IMCI-Delhi-26th-ABCeMag-300410.161214426

de-limiting excellence
Institute
of
Management
Consultants
of
India,
Delhi
April 16-30,
2010
Dr. C. S. Venkataratnam, the
Director of the International
Management Institute (IMI),
passed away in the early morning
of April 16 2010 after a prolonged
illness. Dr. Venkata
Ratnam had joined IMI as
Professor in 1986 and became
the Director in January 2005.
Dr. Venkata Ratnam was an
eminent scholar in the area of
Industrial Relations and under
his leadership IMI grew
significantly in terms of faculty
size, academic programs,
intellectual capital and many new
industry facing activities.
IMCI Delhi has lost a friend and
supporter.
Greetings!
Conferences, media, corporate
and airport lounges along with
‘open collar informal discussions’
have all been buzzing with the
need and issues of corporate
governance. This fortnight, we
share a perspective.
You may respond with yours’ too.
We will carry it in the next issues.
This issue comes to you from my
current consulting location in
Nigeria.
Africa awaits to be discovered,
intensively…
Cheers,
Rajiv Khurana
CMC, FIMC
Tips for Consultants
in this issue…
The Corporate Governance - India
Inc should look for Holistic
Solutions
3-7
8-9
Certified Management Consultant TM
T h e i n t ernational credentials of a
professional management consultant,
reciprocally recognised by global members
of the International Council Of Management
C o n s u l t i n g I n s t i t u t e s [ I C M C I ]
LIFT quotes
About IMCI & Code of Ethics
Misc.
10
11
12

de-limiting excellence
Institute
of
Management
Consultants
of
India,
Delhi
April 16-30,
2010
2/12
Alag Tewar,
Alag Flavour

de-limiting excellence
Institute
of
Management
Consultants
of
India,
Delhi
April 16-30,
2010
3/12
Alag Tewar,
Alag Flavour
The Corporate
Governance -
India Inc
should look
for Holistic
Solutions
P. R. CHANDNA
Metallurgical
Engineer trained
abroad with Global
Experience in
Management &
Engineering
Consultancy,
Projects Execution
from Concept to
Commissioning,
Process Plant
Operations and
General
Management.
Presently working
as CEO & MD,
Yashad
Consultancy (P)
Ltd.
The Corporate Governance, has never ever, since the Satyam
Episode, become such a household word. A confessional letter
of 7 th January 2009 from Mr. Ramalinga Raju, founder
Chairman of Satyam, divulged the accounting scam of the
order of US $ 1.6 billion, and shook the whole country with
tremors felt throughout the globe. Mr. Ramalinga Raju can be
credited as the only corporate fraudster to have admitted his
misdemeanors – fudging of accounts, inflated revenues, nonexisting
profits, and the fraudulent bank deposits and
audaciously sustaining it for seven long years. The Mr.
Ramalinga Raju’s misdeeds, unfortunately had given negative
publicity of India Inc so far a positive story. The fraud has
undermined the trust in the government, companies, and
markets alike. In India, nobody had ever imagined anything to
go wrong at Satyam, one of India’s best known IT companies,
which ironically had received the Golden Peacock Award for
Corporate Governance in 2008.
This episode has led to debates in India, about some of
inadequacies in the corporate governance norms. Questions
have been raised about the performance/ effectiveness of
board of directors, roles of auditors, the impact of regulations,
disclosures, etc. However, the silver lining to this whole
episode was the proactive role played first time ever in India
by the shareholder activists in opposing the unanimously
approved board’s resolution of December 16, 2008, in
acquiring a property of companies (Matyas Properties and
Maytas Infra) owned by the son of Mr. Ramalinga Raju,
which led to revelation of frauds being committed by
promoter behind the scene. If a large company like Satyam
could do it for years, what’s the guarantee more are not doing
it? It is therefore, important that the Satyam fraud needs to
investigated and sentence the fraudsters swiftly and harshly to
increase'deterrent aspects’.
The frauds of such magnitudes provide a good opportunity for
introspection. These times also expose the shortcomings and
vulnerabilities of the system. Conflicts always have hidden
solutions. There are lessons to be learnt from Satyam’s
nemesis too. It is one such great opportunity to reassess some
of the existing framework on corporate governance, systems
for better enforcements of regulations; effective roles and
duties of directors, executives, regulators; ethics in businesses
and empowerment of minority shareholders.

de-limiting excellence
Institute
of
Management
Consultants
of
India,
Delhi
April 16-30,
2010
4/12
OVERVIEW OF INDIAN CORPORATE GOVERNANCE
India’s corporate governance codes are on par with the best in the
world, the importance of continuing to assess it against
international best practice, to suit to the Indian ethos & culture
with utmost sincerity and keenness in enforcement has been
highlighted by the recent fraud at Satyam.
The Indian corporate would appreciate the fact that the corporate
governance in India has not been forced upon them by the
government, but it was a voluntary and path-breaking initiative
from the Indian industries association - Confederation of Indian
Industry (CII). It was necessitated, for the fact that India Inc was
to move forward and globalize itself towards international
standards in terms of disclosure of information by the corporate
sector and, through all of this, to develop a high level of public
confidence in business and industry in the process of building
large global conglomerates. CII had vigorously lobbied and
pressurized the government of India for its implementation.
Corporate governance initiatives in India began in 1998 with
the “Desirable Code of Corporate Governance” – a voluntary
code published by the CII, and the first formal regulatory
framework for listed companies specifically for corporate
governance, established by the SEBI, widely known as Clause 49
of the Listing Agreement – Aimed at improving corporate
governance in the country. The latter was implemented in
February 2000, following the recommendations of the
Kumarmangalam Birla Committee Report.
Legal reforms has been ongoing, with SEBI in 2003 revised
the Clause 49, as per the recommendations put forward by the
committee and public comments received. Subsequently, the
SEBI received a number of feedbacks/ representations, which
were deliberated once again by the Narayana Murthy Committee
and post discussion, SEBI directed further amendment to the
Clause 49 in October, 2004. The amendment to Clause 49 of the
Listing Agreement has been the topic of elaborate deliberations
and discussions in the Indian corporate scene. The difficulties in
achieving compliance prompted many apex chambers of
commerce to appeal for an extension of the extended deadline of
31 December 2005, without success. The ease with which SEBI
introduced mandatory corporate governance standards in India is
unparallel.
Alag Tewar,
Alag Flavour

de-limiting excellence
Institute
of
Management
Consultants
of
India,
Delhi
April 16-30,
2010
5/12
Alag Tewar,
Alag Flavour
The Companies Act, 1956 was undoubtedly a significant
landmark in the development of Company Law in India. It
consisted of 658 sections and fourteen schedules. The Act was
enacted with the object of amending and consolidating the law
relating to Companies and certain other associations. The main
object of the Act was to provide protection to investors, creditors
and public at large and at the same time leaving management
free to utilize its resources and energies for the optimum output.
However, the working of the Companies Act brought to light
several lacunae and defects in its provisions. Therefore, the Act
was amended from time to time. But despite extensive changes
the principal Act still suffers from certain serious defects.
Moreover, after liberalization, the increasing number of options
and avenues for international business, trade and capital flows
had necessitated modernization of the regulatory structure for
the corporate sector in a comprehensive manner.
In 2004, the Indian Government took up a comprehensive
review of the Companies Act, 1956. The aim was to strengthen
compliance norms and to provide a governance structure for
unlisted firms. The new Companies Bill has been based on best
international practices and fosters entrepreneurship. As a result
the Union Cabinet on 29th August 2008 gave its approval for
introduction of the Companies Bill, 2008 in the Parliament to
replace the Companies Act, 1956, the existing statute for
regulation of companies in the country and considered to be in
need of comprehensive revision in view of the changing
economic and commercial environment nationally as well as
internationally. The bill had lapsed with the dissolution of the
house in December 2008 and it has now been re-introduced on
3rd August, 2009. The Companies Bill seeks to enable the
corporate sector in India to operate in a regulatory environment
of best international practices. The provisions of Companies Bill
are broadly considered to be suitable for addressing various
contemporary issues relating to corporate governance, including
those recently noticed during the investigation into the affairs of
erstwhile Satyam.
The bill has now been re-christened as Companies Bill 2009,
and has been forwarded to a Parliamentary Standing Committee
for recommendations. With the standing committee set with no
time frame for giving its recommendations, the passage of the
new law is likely to take over a year. It is quite sad that the
amendment of the Company Act 1956 has been languishing for
so many years now. It is earnestly hoped that speedy passage
of the Companies Bill will now be ensured.

de-limiting excellence
Institute
of
Management
Consultants
of
India,
Delhi
April 16-30,
2010
6/12
Alag Tewar,
Alag Flavour
LESSONS FROM SATYAM EPISODE
The Satyam board on December 16, 2008, had
unanimously approved a proposal to acquire 100
percent of closely held Maytas Properties for Rs 6,240
crore ($ 1.3 billion) and 51 percent of Maytas Infra for
Rs 1440 crore ($300 million). The latter acquisition was
proposed to be done in two stages: first, Satyam would
acquire 31 percent from the promoters at Rs 475 a
share, and in the second, it would buy another 20
percent from the market through an open offer at Rs
525. The two acquisitions would have totals
expenditures of Rs 7680 crore ($1.6 million).
The immediate reaction of institutional shareholders and
investment analyst, as soon as the information become
public the next day, was that it was daylight robbery and
the promoters were siphoning money out of Satyam.
They further vehemently reacted and said that they
would to go to any length to prevent this from
happening. Mr. Ramalinga Raju was left with no option
to abandon the plan at the first place, but also had to
put in his papers, confessing cooking of the books for
several years, on 7th January 2009, sending
shockwave all throughout the corporate board.
However, the silver lining to this whole episode was the
ascendancy of the Shareholders Activism, one of the
first times ever in India. But for the proactive role played
by the shareholders and the institutional investors, the
nefarious activities committed clandestinely by
promoters would not have seen the light of the day.
In the Indian context, it is well known that the many of
the companies are controlled by the families and would
like these to be handed over to their sons and
daughters. The promoters may pursue interests that are
not necessarily desirable from the point of view of the
commercial success of the company. The promoters
are all powerful making even the academically well
qualified Independent Directors, as in the case of
Satyam having people like; Vinod K Dham, Mendu
Rammohan Rao, Krishna G Palepu, Mangalam
Srinivasan…, appear dwarfs and not of independence.
This has brought to attention once again the role of the
independent directors.

de-limiting excellence
Institute
of
Management
Consultants
of
India,
Delhi
April 16-30,
2010
7/12
Alag Tewar,
Alag Flavour
As a consequence of the fallout, all the independent directors had
resigned one after another. These included Mangalam Srinivasan,
Vinod K Dham, Krishna G Palepu, T R Prasad, Prof. V S Raju and
M Rammohan Rao.
It is one thing to have elaborate codes, but quite another for
companies to follow them in letter and spirit. Yet another is the
question of enforcement if companies do not adhere to the
standards. Weakness of enforcement in India is a real issue. The
unraveling of these events at Satyam has once again put spotlight
on some of the corporate governance practices and has exposed
the following weaknesses:
1.Lax Regulatory systems.
2.The imperious and Machiavellians promoters/ CEOs and their
unbridled greed.
3. Connivance and collusion of Auditors and poor auditing
practices.
4.Timid and acquiescent independent directors.
5.Shareholders activism and Empowerment of minority
shareholders.
6.Empowerment of Whistle blowers.
We ought to refrain from taking quick-fix regulatory measures. It
would be worthwhile to search for holisticsolutions to these
issues; which are relevant in the Indian context. The choice of
changes in the regulatory frame work should be compatible with
the country’s own values and legal system. The system adopted
should be agile enough to fore warn the early signals of a brewing
crisis and take corrective measures. The system should
encourage “proactiveness” rather than be a "reactionary",
otherwise status will not change. With the present day state of art
computer technologies, this is not impossible.
One must, however, understand that no matter how strong a
regulatory system is, it cannot always prevent frauds. Despite the
enormous increase of disclosures and stringent risk management
systems in US post the Sarbanes Oxley Act (SOX), inability of the
system to read the early sign of impending recent Subprime crisis,
Madoff's Ponzi scheme, and willingness to take corrective action is
one such example. Moreover, strong measures often lead to
expensive regulations and defiance. There are limits to legislations
as a lot depends on the integrity and ethical values of various
corporate players such as directors, promoters, executives and
shareholders. The key lies in management decisions and its
commitment to establish and follow rigorous governance systems.
The implementation must be in the letter and spirit, and one should
recognize the responsibility of the company towards its
stakeholders.

de-limiting excellence
Institute
of
Management
Consultants
of
India,
Delhi
April 16-30,
2010
8/12
I get concerned when I hear people say, "After I retire, I
think I'll do a little consulting." They seem to think that
just because they have years of experience in a
technology or industry, this somehow qualifies them to
just wake up one day and start advising management.
Am I wrong in feeling this way?
Management consulting is an unlicensed occupation, thus
has low barriers to entry. However, it is still a profession
requiring specific standards, a body of knowledge,
competencies, skills, behaviors, and ethics. Too many
organizations find out the hard way that hiring someone who
"does a little consulting" is vastly different than hiring a
professional consultant.
Much of consulting's bad reputation comes from individuals
who portray themselves as professionals but lack the skills,
behaviors or discipline required. Experience is not the same
as skill.
Having experience in an area has little to do with one's
ability to advise management in that area. It is like saying, "I
raised three children over the past twenty years - I think I'll
do a little pediatrics." Such a statement is laughable, and
you wouldn't trust your child to someone who made that
claim. So why would you trust your company to someone
who isn't certified?
To assure expertise and skills, we recommend using only
those professionals who are certified or licensed by a
national or international body. Examples include
Professional Engineers (PE), medical doctors (MD),
Certified Public Accountants (CPA), and Certified
Management Consultants (CMC). All of these professionals
prove a long term commitment to the profession and meet
or exceed rigorous professional standards. This should give
clients the assurance that they are "in good hands."
With ISO 17024 standards for management consultants on
the horizon, it is becoming apparent to more managers that
professional standards are a preferred way to select
consultants. As the international standard for management
consultants, recognized in 46 countries, the Certified
Management Consultant (CMC) designation is becoming
the global standard for managers to find trusted, proven and
ethical professional consultants.
Alag Tewar,
Alag Flavour

de-limiting excellence
Institute
of
Management
Consultants
of
India,
Delhi
April 16-30,
2010
The industry I consult to is growing so fast that I'll
never be able to market to all of them. How can I
get more leverage than by contacting each one
individually?
Trade and industry associations exist to serve their
members. In associations where the members are
companies, the association often collects information
on member capabilities, activities, and investment or
customer service plans. They often publish a
newsletter or studies of industry activity, key issues or
trends and major opportunities or constraints facing
the industry.
If you consult to an industry, you should be in close
contact with the trade association (sometimes there
are several for various aspects of an industry). Use
collected information on the industry or, better yet, do
your own research or write articles for the association
publications. Speak at their annual conference, join as
an affiliate member, and participate in forums or study
groups.
Being front and center in an industry as an active
participant in an association demonstrates to others
that you are a professional. Imagine how much more
credible as a trusted advisor you are when industry
mavens see your name in industry association
publications and know you are committed to their
industry. Make sure they know you are a member or
are otherwise affiliated with the association.
Tip: The effect is similar when you talk to your clients
and let them know that you are a member of a
professional consulting organization and not "just
doing a little consulting" while looking for another job in
the industry. Certainly, being able to show that you are
a member of IMC, which sets the standards and
competency framework for professional consulting in
the US, enforces ethics and certifies consultants to
global standards, will increase your credibility.
9/12
Alag Tewar,
Alag Flavour

de-limiting excellence
Institute
of
Management
Consultants
of
India,
Delhi
April 16-30,
2010
10/12
Alag Tewar,
Alag Flavour
The secret of a leader lies in
the tests he has faced over
the whole course of his life
and the habit of action he
develops in meeting those
tests.
- Gail Sheehy
Leaders establish the
vision for the future
and set the strategy
for getting there; they
cause change. They
motivate and inspire
others to go in the
right direction and
they, along with
everyone else,
sacrifice to get there.
- John Kotter
Leadership Ideas For Today
Extracts from the gift book- LIFT,
pending print, by
- Rajiv Khurana, CMC, FIMC
The Gift of Insults
The Gift of Insults
There once lived a great warrior.
Though quite old, he still was able to
defeat any challenger. His reputation
extended far and wide throughout the
land and many students gathered to
study under him.
One day an infamous young warrior
arrived at the village. He was
determined to be the first man to
defeat the great master. Along with
his strength, he had an uncanny
ability to spot and exploit any
weakness in an opponent. He would
wait for his opponent to make the
first move, thus
revealing a weakness, and then
would strike with merciless force and
lightning speed. No one had ever
lasted with him in a match beyond
the first move. Much against the
advice of his concerned students, the
old master gladly accepted the young
warrior's challenge. As the two
squared off for battle, the young
warrior began to hurl insults at the
old master. He threw dirt and spit in
his face. For hours he verbally
assaulted him with every curse and
insult known to mankind. But the old
warrior merely stood there
motionless and calm. Finally, the
young warrior exhausted himself.
Knowing he was defeated, he left
feeling shamed. Somewhat
disappointed that he did not fight the
insolent youth, the students gathered
around the old master and
questioned him. "How could you
endure such an indignity? How did
you drive him away?“ "If someone
comes to give you a gift and you do
not receive it," the master replied, "to
whom does the gift belong?"

de-limiting excellence
Institute
of
Management
Consultants
of
India,
Delhi
April 16-30,
2010
11/12
Alag Tewar,
Alag Flavour
ICMCI
The International Council of
Management Consulting Institutes
is the global association of national
management consulting institutes
from around the world. These
national institutes administer, in
accordance with world class
standards, the international "CMC"
certification Certified Management
Consultant earned by individual
professional management
consultants.
More details: icmci.org
IMCI
The Institute of Management Consultants
of India (IMCI) is the apex body of
management consulting professionals,
being the only registered institute of
established management consultancy
firms and practicing individuals in the
country.
Constituted in 1991, IMCI was formerly
known as the Management Consultants’
Association of India (MCAI), which was
founded in 1963.
In 1989, IMCI became the first Asian
organisation to be accepted for
membership of the International Council
of Management Consulting Institutes
(ICMCI), the global apex body of
Management Consulting Institutes. ICMCI
has 46 member countries in the world.
The Executive Secretariat of IMCI is
located in Mumbai. The Institute has
regional Chapters in Ahmedabad,
Bangalore, Calcutta, Chennai (Madras),
Delhi, Hyderabad, Mumbai (Bombay) and
Pune.
CMC Designation
IMCI endeavors to raise the standards of
management consulting by awarding
Certified Management Consultant (CMC)
designation to individual members who
have passed a qualifying examination
and have met the profession’s standards
of competence and ethics. The CMC
designation implies international
recognition to worldwide standards.
More details: imcindia.co.in
Code of
Professional
Conduct for
IMCI members
Minimum Guidelines
Confidentiality
A member will treat client information as
confidential and will not take personal advantage
of privileged information gathered during an
assignment, or enable others to do so.
Unrealistic Expectations
A member will refrain from encouraging unrealistic
expectations or promising clients that benefits are
certain from specific consulting services.
Commissions / Financial Interests
A member will neither accept commissions,
remuneration or other benefits from a third party
in connection with recommendations to a client
without the client’s knowledge and consent, nor
fail to disclose any financial interest in goods or
services which form part of such
recommendations.
Assignments
A member will only accept assignments for which
the member has the skill and knowledge to
perform.
Conflicting Assignments
A member will avoid acting simultaneously (in
potentially conflicting situations) without
informing all parties in advance that this is
intended.
Conferring with Clients
A member will ensure that before accepting any
engagement, a mutual understanding of the
objectives, scope, work plan and fee arrangements
is established and any personal, financial or other
interests which might influence the conduct of the
work are disclosed.
Recruiting
A member will refrain from inviting an employee of
a client to consider alternate employment without
prior discussion with the client.
Approach
A member will maintain a fully professional
approach in all dealings with clients, the general
public and fellow members.
Code of Professional Conduct
A member will ensure that other management
consultants carrying out work on the member’s
behalf are conversant with and abide by the Code
of Professional Conduct.

de-limiting excellence
Institute
of
Management
Consultants
of
India,
Delhi
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What does it take?
We await your
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suggestions,
contribution,
support …
April 16-30,
2010
12/12
Alag Tewar,
Alag Flavour
Patron:
Dr. M.B.Athreya
Mentors:
Dr. S.R.Mohnot
Mr. Shashi Budhiraja
Dr. Sunil Abrol
Past Chairmen:
Mr. Ashok Kumar
Mr. Ramesh Tyagi
Chairman
Rajiv Khurana
Dy. Chairman
Sumit Chaudhuri
Hon. Secretary
Vijay Nagrani
Hon. Treasurer
M S Sridhar
Executive Members
S A Khader
Anand Chhabra
Regional Rep.
S A Khader
IMCI – Delhi
imcidelhi@gmail.com
This eMag is meant for free electronic circulation amongst members & friends of IMCI - Delhi