Ensuring Corporate Governance Managing Change Expansion beyond national boundary(Go global)

Manager do things right and the leaders do right things.

It is founded on strengths of the enterprise It will offer attractive/challenges in future It will be articulated through the leader, across the board It will be re-in forced by the management by total ownership across the board It will be fully integrated into the culture of the enterprise

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Honesty in dealings with the owners, share holders and board.

To provide the direction, path and movement as well as momentum which implies that the board has to give the direction to take the enterprise purposefully into the future. Futuristic and creative/innovative role Upholding three values of governance Transparency to the owners in assessing the risks to the enterprise and the decision process Accountability to the shareholders Honesty in all their dealings within and outside the board.

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Duty of care They must earmark enough time for their keen indulgence in the board matters/papers prior to the meeting. They must budget time for discharging their duties. They must read papers and take independent decisions. Directors exist not just to say yes or no to an agenda in discussion. They must exercise their independent decisions and in case of disagreement with the CEO on any issues they must come out in the open and disagree. They have to give their independent decision which is in the best interest to the company/shareholders A director having more than, say, two/more directorship posts in other firms, will be at the cost of the company. Directors must be trained so that they are able to select the highly professionally trained and experienced candidates for posts of senior management

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Duty of trust Owning social responsibilities Pay attention to task performance and deliver primary roles Take appropriate, long-term well-defined decisions to take the company business forward. Strategic thinking Ensuring accountability Policy formulation Supervising the management Loyalty to the company Independent views and critical thinking Learning organization concept-Learning can take place at all levels /across the board, besides nurturing the climate of learning in the company.

Improvement in its quality. Judiciary, bureaucracy, political and the police which are pillars. P. Senge (The Fifth Discipline: The art and practice of the learning organization, Random Century, NY, 1990) - A learning organization is one which continuously expands to create its future. Learning from others Learning from past experience Systematic problem solving Transfer of knowledge Experimentation-Total Quality Improvement, Kaizen.

BALANCE D SCORE CARD Prof. R. S. Kaplan and David P. Norton-They considered the classical method of financial measurement to be the cause of doing wrong things in organizations. Financial measures are indicators of outcome of past activities. According to them, these are what they termed as lag indicators. (they opined that total dependence on financial indicators was the root cause of shortsighted managerial actions which resulted in short-term performance, side-tracking long-term value creation.) Strategy map: A Strategy map is a systematic, detailed architecture for outlining strategy. It is a basis for designing a balanced scorecard. Strategy map and balanced scorecard deal with the deficiencies of the system of measurement, based on assessment of the tangible assets of the erstwhile industrial age. The new approach shows the linkage of cause and effect inter se in strategy maps-how the tangible assets get transformed into financial results(tangible results).

A scorecard used non-financial quantitative measures, that is market share, satisfaction, competencies, innovation, creativity, cycle time. These measures lead to value and are measurable. Principle of aligning the organization to the strategy. Principle of involving everyone in the strategy

Dimensions a. Financial dimension

Strategic themes Return on capital employed Customers delight and developing win-win perspectives through customer-driven goods/services, developing dealer/market. Leadership in safety and reliability in refineries, be a competitive supplier of quality products/services-better than the market leader and protect health and safety of staff, community. Developing and valuing team work

b. Customer relation dimension

c. Internal business functioning aspects/dimension

d. Learning and growth

Strategy was linked to the budgetary making process Management review meetings: Monthly or quarterly each manager was allowed opportunity to express his views Information reporting system Organizational strategy was considered to be everybodys business A learning ambience created Executive leadership for mobilizing change

FOUR DIMENSIONS Organizational internal business processes Customer perspectives Learning and growth dimensions Financial perspectives In organizational internal business processes, the focus was given on setting the priorities in creating satisfaction for the shareholders and customers through internal processes of the organization. In customer perspectives, organizational strategy focused on creation of value and differentiation in the product from the viewpoint of the customer. In learning and growth dimensions the focus was on the priority in activities which will create an ambience that will endure innovation, growth and change in the organization. In financial perspectives the focus underlined the priorities for growth and change in the organization. In financial perspectives the focus underlined the priorities for growth, the bottom line and management of risks from the angle of the shareholders who are the main stakeholders in the business. Balanced scorecard method is a departure from the conventional performance measurement based on financial performance and the budgetary system.

(Profit perspective is dominant) Finance based strategy and vision

Individual motivation provided

Budget

Subject to regular review and correction

Resource allocation and planning

Implement vision

Feedback and learning Strategy

Balanced scorecard method

Communicating and linking strategy

Business / Corporate Plan