A Report on Regional Directors' Conclave 2024 on Corporate Governance

The Institute of Directors (IOD), Chennai Region organised the Annual Regional Directors' Conclave 2024 on Corporate Governance, on the theme: ‘Emerging Trends in Corporate Governance and Sustainability’. The event took place on July 27, 2024, at the Hotel GRT Grand in Chennai, Tamil Nadu. The event saw an impressive turnout, with around 150 participants, including government officials, business leaders, board members, directors, industry and board experts, policy-makers, and educationists. The program commenced with the traditional lighting of the lamp, followed by the rendition of the Tamil Thai Vazhthu, setting a solemn and respectful tone for the proceedings.

Inaugural Session

The 'Welcome Address' was delivered by:

Mr. G. Srinivasan
Chairman - Chennai Region, Institute of Directors
Former CMD, The New India Assurance Co. Ltd.

Mr. Srinivasan highlighted that investors are increasingly valuing strong governance for enhancing organizational valuation. He noted that poor governance can lead to a company's downfall, emphasizing that governance extends beyond compliance to include fairness, ethics, and inclusivity. Key governance pillars include: Transparency, Value Creation for All Stakeholders, Accountability, Risk Assessment and Mitigation, Sustainability, and Reporting Norms. Together, these elements build a robust framework supporting organizational resilience and success.

This was followed by the 'Guest of Honour Address' delivered by:

Dr. Sandeep Saxena, IAS
Additional Chief Secretary
Chairman & Managing Director, TNPL, Chennai

Dr. Saxena emphasized our duty to preserve resources for future generations, stressing fossil fuel conservation and the role of technology. He mentioned that at TNPL, technology reduced water use in paper production from 200 liters to 20 liters per ton. He also highlighted the ethical obligation for companies profiting from natural resources to reinvest in society and noted that Analytics, Robotics, AI, and ML can drive sustainability and enhance corporate governance.

This was followed by the 'Special Address' delivered by:

Mr. K. Pandiarajan
Executive Chairman & Director, CIEL Group
Former Minister for Tamil Official Language, Tamil Culture and Archaeology; and School Education, Youth Affairs and Sports, Government of Tamil Nadu

Mr. Pandiarajan discussed the evolution of governance from government administration to private enterprises and highlighted the downfall of companies like ENRON due to unethical practices. Mr. Pandiarajan noted that governance now encompasses Valuation, Value Creation, Venture Capital, and Business Models. He emphasized that effective governance requires strong leadership and engagement, sharing an anecdote about a tech entrepreneur struggling with governance issues. He cautioned against letting ESG and DEI principles overly increase operational costs, stressing that fostering leadership and engagement is key to ensuring organisational longevity and success.

This was followed by the 'Vote of Thanks' proposed by Mr. R. Srinivasan, Regional Director of Institute of Directors, Chennai. Mr. Srinivasan thanked the ‘Guest of Honour’ Dr. Sandeep Saxena, IAS and other distinguished speakers of the Session, Mr. K. Pandiarajan for sparing their valuable time.

Plenary Session I

The 'Special Address' was delivered by:

1. Mr. S. Chandramohan
Director & Group President - Finance & Investment
Tractors & Farm Equipment Ltd. (TAFE), Chennai

2. Mr. Varun Chopra
Executive Chairman - Gemini Equipment and Rentals Pvt. Ltd. (GEAR), Mumbai

3. Mr. Jayant Nadiger
Trade & Investment Commissioner
Flanders Investment & Trade (Belgium)

Mr. Chandramohan spoke on the theme, 'Evolving Trends in Corporate Governance'. He highlighted the four pillars of Corporate Governance, with 'People' as the top priority. He noted TAFE's focus on stakeholders, including longterm family-run dealers who provide valuable feedback. The second pillar, 'Vendors,' are key supply partners involved from design to delivery, with TAFE offering timely payments and support during crises. The third pillar, 'Employees,' benefit from opportunities to work with emerging technologies, promoting career growth and long-term employment. The fourth pillar, 'Government,' involves full transparency in accounting and tax compliance, earning praise from auditors. TAFE's governance practices, though not legally required for a private company, align with industry leaders like Infosys and L&T. He summarized TAFE's approach with the "4 Ps": Purpose, Process, Product, and Performance.

Mr. Chopra spoke on the theme 'Sustainability and the Journey to Net Zero'. He highlighted GEAR India's role in reducing carbon footprints within the Material Handling Equipment (MHE) industry. He noted GEAR India's leadership with innovative, low-carbon Forklifts and the use of lithium-ion equipment, which reduces emissions. The company also plans to use solar energy for charging, underscoring its commitment to achieving Net Zero and fostering a sustainable future.

Mr. Nadiger spoke on the theme, 'Internationalization: Flanders, Belgium – A Gateway to Europe,' highlighting Flanders' strategic location as a key entry point to the EU. Positioned in northern Belgium, Flanders is centrally located near the Netherlands, Germany, France, and the UK. This central spot provides access to a major economic hub where 60% of Europe's purchasing power is concentrated. Flanders excels in industries such as biotechnology, pharmaceuticals, food production, and logistics, with most Belgian exports originating from the region and reaching global markets. He highlighted some of the key export sectors of the Flanders Region, which include chemicals and pharmaceuticals, transport equipment, machines, devices, and electronics, minerals, plastics, food and beverages, pearls, gems, and diamonds, textiles, & optics and precision equipment.

This was followed by an interactive Q&A Session with the audience.

Plenary Session II: Corporate Governance & Choice of Tamil Nadu as a preferred Investment Destination

The session was Chaired by:

Mr. Ram Ramasundaram, IAS (Retd.)
President of Corporate Affairs
Hero Future Energies, Chennai

The Session had the following distinguished Speakers:

1. Mr. Joshua David
India Campus Head - Mphasis, Chennai

2. Prof. Dr. Ajith Pillai Head of the Department of Cardiology - Kauvery Hospital, Chennai

Mr. Ramasundaram discussed how transparency and strong governance are crucial for attracting global Foreign Direct Investment (FDI), using the USA as a prime example. He pointed out that even smaller countries like Singapore attract more FDI than India. In India, Maharashtra, Gujarat, Tamil Nadu, and Karnataka receive 80% of FDI, largely due to their governance standards. He also noted that Tamil Nadu's high percentage of skilled women workers (46% of the country's total) enhances its attractiveness for investment.

Mr. David addressed the issue of the talent mismatch between industry needs and the skills available from educational institutions. He described initiatives by visionary IT companies like 'Mphasis' to bridge this gap by aligning educational programs with industry requirements.

Prof. Dr. Pillai highlighted Chennai's rise as a major medical tourism hub, citing its skilled professionals, trained support staff, and advanced technology. He noted that medical care in Chennai is 50 to 100 times cheaper than in other high-infrastructure regions, benefiting the MENA market and neighboring countries. Prof. Pillai suggested localizing the production of implants, which are mostly imported, to reduce costs, similar to China's approach. He emphasized the need to expand local capabilities from software to hardware in the biomedical field.

This was followed by an interactive Q&A Session with the audience.

Plenary Session III: Corporate Governance in the Healthcare Industry

The Session was moderated by:

Dr. Sriram Natarajan
Governance Board Member
The Supply Chain Health Consortium - Seattle, USA
Former Country Manager/Director, SGS Lanka

The Session had the following distinguished Speakers:

1. Ms. Sowmya Ramanathan
Vice President – Human Resources
Wenger & Watson Inc., Bengaluru

2. Dr. Suresh S.
Medical Oncologist
Apollo Hospitals, Vanagaram, Chennai

3. Dr. Aghilavendan P.
Spine Surgeon (Ortho) and Orthopedic Surgeon
Apollo Hospitals, Vanagaram, Chennai

Dr. Natarajan explained Corporate Governance, emphasizing its alignment with the enterprise's purpose and efficient infrastructure. He discussed compliance with international norms, specifically the Corporate Sustainability Due Diligence Directive (CSDDD), which mandates companies to conduct thorough human rights and environmental due diligence for their operations and those of their partners. Mr. Natarajan illustrated this by detailing measures to address child labour in football stitching units and reduce carbon emissions in garment factory operations, ensuring responsible practices.

Ms. Ramanathan emphasized that Corporate Governance is crucial in healthcare, especially given the sensitivity to emergencies and the service ecosystem in a VUCA (volatility, uncertainty, complexity, and ambiguity) world. She highlighted the importance of awareness, training, and knowledge sharing to enhance operational efficiency in alignment with the healthcare enterprise's purpose. She also stressed that effective communication, including digital communication, and the use of metrics for evaluation and improvement should be integral to healthcare operations.

Dr. Suresh noted that advancements in technology and off-patent drugs are reducing the cost of cancer treatment. He expressed concern over the reluctance of Indian patients to participate in clinical trials, unlike in countries like Brazil, Thailand, and the Philippines, despite the benefits to society and full coverage of associated risks. Dr. Suresh highlighted that immune therapy costs in India are much lower than in the U.S. and elsewhere, thanks to collaboration between medical institutions and the government to reduce material costs. He emphasized that Corporate Governance is driving social and cultural change in addressing life-threatening conditions like cancer.

Dr. Aghilavendan explained how he applied corporate governance principles in his practice, supported by the hospital's infrastructure. He described how an overseas patient with an extended hospital stay was provided with empathetic care, service orientation, personal attention, truthful communication, and effective risk management.

This was followed by an interactive Q&A Session with the audience.

The 'Closing Remarks' were proposed by:

Dr. Sundari Suresh
Regional Manager - Chennai Region
Institute of Directors

Dr. Suresh highlighted the crucial role of Corporate Governance in ensuring a sustainable future and achieving higher valuations. The discussions underscored the importance of ESG obligations in building trust and the vital role of Independent Directors in ensuring compliance and mitigating risks. Her remarks effectively tied together the event's themes, reinforcing the connection between sustainability and good governance. Dr. Sundari thanked all speakers and dignitaries for gracing the event, and also thanked the audience for their active participation.

The Conclave culminated with the playing of the National Anthem.

The Institute of Directors, Chennai Region is especially grateful to its event partners:

Silver Partner: Indian Bank

Government Associate Partner: Guidance Tamil Nadu

Supporting Partners:

1. Flanders Investment and Trade (Belgium)
2. Apollo Hospitals
3. Tamil Nadu Newsprint and Papers Limited (TNPL)
4. PKF Sridhar & Santhanam LLP
5. Gemini Equipment and Rentals Pvt. Ltd. (GEAR) India
6. Apollo Pharmacies
7. Kauvery Hospital
8. Corporate Advisory Group

Nutrition Partner: UNIBIC

This report is compiled by:

Dr. Sundari Suresh
Regional Manager - Institute of Directors, Chennai Region