CFO-Asia presentation for Nov16, 2006

11/27/2006 Copyright © K.Sriram 1

Governance, Ethics & Asia’s Finance Leaders

Need for an effective Corporate Governance frameworkGovernance challenges faced by Asia’s Finance LeadersHow Asia’s Finance Leaders can foster & promote good ethical practice within their organizationsBenefits of having a strong company culture on Governance & EthicsCorrelation between good Governance & EthicsTake aways on Ethics

This presentation deals with…



Accountability failures (many were the result of significant structural weakness in corporate governance & accountability models combined with a lack of personal ethics & integrity)

Loss of billions ($$$) of invested capital

Loss of Investor confidence

Impact on livelihood for many employees

Impact on work ethics & culture

Impact on public confidence & trust

Impact on local & national economies

Need for a Corporate Governance Framework

Harvey Pitt answers...

Q) How has the world changed since Enron collapsed?

A) Discipline within companies has gotten a lot better. People have spent more time getting their systems under control and making sure they have good internal controls. And we've all gotten smarter ☺



Shareholder value maximization in an era of hyper-competitionManaging / Mitigating risks for shareholdersEthical conduct (transparency) & complianceImprove corporate financial reporting & internal controlsHiring the right person with right skills & valuesCreating / demanding accountability from ‘one and all’Ethical decision makingStrengthening audit committeesBe an effective advisor to the Board of Directors

Challenges faced by Asia’s Finance Leaders



Trust to be the ‘bedrock’ on which an ethical structure (framework) could be builtCompany-wide ‘Code of Ethics / Conduct’Leaders demonstrating ethical behavior – ‘The Boss should be more Catholic than the Pope!’Regular training of junior & senior officers on ethical behavior and conductEstablished whistle-blowing policy & protection for whistle-blowersEthics committee - Review, Monitor & Implement policiesReview of ethical behavior during recruitment and performance appraisals

Fostering & promoting ethical practice



Feel-good factor & Trust amongst employees & other connected stakeholders

Staff motivation & morale – Increased efficiency

Preferred employer status – Caring company

Regulatory compliance

Overall reputation & brand-building – Good Corporate Citizen status

Maintain excellent reputation with banks, financial institutions & investment community - About one in every ten dollars of assets under management in the U.S. - an estimated $2.3 trillion out of $24 trillion - is being invested in companies that rate highly on some measure of social responsibility- FORTUNE Magazine

Competitive edge – Impact on business performance

Benefits of a strong ethical culture



Positive correlation between governance & ethicsGood corporate citizenship status

Correlation between good governance & ethics

Companies that demonstrate ethical leadership & superior governance:



Ethical behavior to be a requirement, not an option

Ethics, a must in all daily interactions with internal, external & connected stakeholders

Communicate the desired ethical behavior in an ethics Code of Conduct

Preserve ethics to let everyone know ethics is here to stay

Preserve an ethical culture that perpetuates ethics

Promote ethics and their long-lasting benefits

Promote ethics from the top – Remember…Bottleneck is always at the top of the bottle!

Promote a company culture where ethics is for everybody

Never forget to reward ethical behavior

Take aways on ‘Ethics’…



Questions?

Thank You ☺


Event Photos (1 of 3)





Documents

CFO-Asia presentation for Nov16, 2006