'Disclosure transparency key to foreign inflows'

Integration of markets has given a new dimension to the concept of corporate governance across the world.

Y M Deosthalee, chief financial officer and member of the board, L&T, at a seminar on Director's Power Breakfast meeting of 2004, said, "Quality of disclosures and transparency to all shareholders including minority ones will be the determining factor for attraction of big ticket foreign investments in a company."

He also added, "Shareholders have realised that bad governance costs money and regulators across the world are tightening listing, disclosure, and takeover norms." The seminar was sponsored by Tata AIG General Insurance Company.

Dalip Verma, MD, Tata AIG General Insurance Company said, "The spotlight on the board for disclosures and transparency will increase and independent directors will be monitored and questioned for their obligations and duties in the company."

The obligation on good governance goes beyond shareholder value, it extends to consumers as well.

"In some European countries it is mandatory to provide insurance cover to things that are consumed be it medicines, genetically modified products, or even mineral water for at least 30 years, as the after effects of any of these can last up to as many as 30 years. Even in India where bio-technology is in the upswing, it is becoming important to take these kind of insurance cover, as the after effects are still not known."

Further, in most of the developed nations the directors' check for the directors and officers cover before taking on a new assignment/ job. Since, they are accountable to all stakeholders' of the company and hence have unlimited liability, Verma added.