Professional Documents
Culture Documents
Assignment - A
Question 1. What is a code of good Corporate Governance? Do you consider it can serve
any useful purpose in improving governance? Support you answer with examples.
Question 2. Chairman of the BOD has a pivotal role in the performance of BOD, Do you
agree? Support your answer with reasons and example.
Question 3. What are the three major committees of the Board? Discuss their role and
usefulness?
Question 4. The concept of the Chairman cum Managing Director in Public Sector
Undertakings has been in vogue for quite some time. This defeats the purpose of
Chairman of Board for Directors exercising checks and balances on the performance of
Managing Director / Chief Executive Officer. Discuss
Assignment - B
Question 1. The CII's desirable code of corporate governance stresses more on the role of
Board of Directors and therefore has limited values. Comment.
Case Study
Ram Krishan Dhir (RKD) was extremely happy to be selected as the corporate MD of the
United Group at Indore. The United Group consisted of three industries, all located
within 30 Km of the corporate office, Indore. Madhya Pradesh Medical Equipments Ltd.
(MPMEL) was one of the industries of this group. Each industry of the group had its own
CEO who was directly answerable to the corporate MD.
MPMEL established in 1980, with Japanese collaboration, had soon earned a name for its
quality and customer responsiveness. By 1983, with employee strength of around 300
MPMEL with very harmonious industrial relations, and the latest technology had
registered a good turn over o over Rs. 80 Crores. But there the success story ended. Mr.
Raj Anand , The original promoter of the group died in an air crash and his eldest son Mr.
Virat Anand (VA) took control of entire business in January ,1984. Virat was a spoiled
brat, lived in luxury, had no qualms about swindling money wherever possible and had
least regards and considerations for the professional management and the employees.
MPMEL's down ward journey had truly begun. By 1987, it had witnessed change
of 4CEOs and 12 middle /junior levels managers. Most of present set of managers were
hand picked by Virat and groomed in his culture of scant concern for the employees and
the organizational growth. In the following years, the MPMEL lost many of its major
customers, Performance, quality of its medical equipment and industrial relations
deteriorated. It was defaulting often on its payment to the lending bankers and even the
salary payment to its employees was often delayed and even withheld. By February 1989,
when RKD was taking over as corporate MD, the situation was:
a. Two of its leading lending banks (Syndicate Bank and Bank of Baroda) had
stopped further payments & over drafting to MPMEL and had served notices to MPMEL
for clearance of its dues.
b. Four of its old and professional directors of the Boars of Directors, had resigned
and replaced by cronies and relatives of VA
c. Industrial relations in the MPMEL were bad and there was total lack of trust
between the management and employees. A number of local "DADAS" were in control
of the employees and MPMEL employees had gone on a violent strike in November,
1988 for irregular payment of salaries, adhoc promotions and inaction of outstanding
issues. The striking employees had physically beaten up the CEO and some other
managers and damaged a number of buildings and windows. They had however, spared
the main air- conditioned production complex. The strike had ended by police
intervention and signing of a Long -Term Agreement (LTA)with the Union employees.
Promised actions by the management were over due.
d. The other two industries of the United Group were only slightly better but
heading downwards.
e. MPMEL was still operative and producing good quality equipment at about 50%
capacity. The rejection rate however, had increased considerably and there was a large
dump of rejected quality equipment. The quality control department was totally
disheartened due to dismissal of its good manager six months ago without any
replacement and no one was paying any attention to their concerns and suggestions.
f. The turn over in 1988 had dropped to Rs. 36 crore.
RKD, an MBA and an ex DIG Police, with an excellent track record as a good
administrator and a person of high integrity was determined to bring about a major
change in MPMEL. Within a month of his taking over, after his discussions with a
section of employees and their union leaders, senior managers, some experts (two of
them were ex-MDs) and the Chairman of the BOD, he realized that their problems had
nothing to do with their products and technology but they seem to weave around the
management of Human Resources and excessive withdrawal of funds by the Chairman.
There were strong indications of continuing rumblings, dissatisfaction among employees
and lack of faith in management despite the LTA.
Question 1. Analyze the situation, as RKD, as you see it and suggest a course of action
you propose to take?
Question 2. What actions in particular you plan to take to change the culture of MPMEL?
Assignment - C
5. As per Raja J Chelliah weakness in the system of governance in India can only be
remedied through--
(a) Stricter laws
(b) Movement of moral regeneration
(c) Codes of conduct
(d) More privatization
6. A Corporate must be socially responsible for--
(a) Society expect so
(b) It is in the self inter of the corporate
(c) It mitigate pressure and government regulations
(d) All the above
9. In the private sector who has the firm hold over the companies?
(a) Individual investors
(b) Promoters
(c) Financial Institutions
(d) Customers
10. In the public sector who selects/ appoints the board members?
(a) The PSU concerned
(b) Controlling administrative ministry
(c) The BOD
(d) Financial Institutions
17. The directors appointed by financial institutions on the BOD are called--
(a) Non-Executive directors
(b) Executive directors
(c) Nominee directors
(d) Institutional directors
19. One of the terms of reference for SEBI's committee on corporate governance in May
1999 was--
(a) To draft a code of corporate best practices.
(b) To offer comments on the Sir Cadbury's report.
(c) To draft instructions for an effective BOD.
(d) None of these
23. Cadbury Committee along with its report published a document which was called--
(a) Code of conduct for corporate
(b) Code of ethical conduct
(c) Code of best practices
(d) None of the above
24. Desirable Corporate Governance in India - A code had recommended that a full
board's meeting agenda item should require at least-------discussion.
(a) 2 days
(b) 1 day
(c) half a day's
(d) None of these
26. Which out of the following is not expected out of an effective BOD?
(a) Transparency of disclosure
(b) Accountability to shareholders
(c) Dependency of decision making
(d) Responsiveness to society
27. Who prepared the report titles "Desirable Corporate Governance in India - A Code "?
(a) Government of India
(b) FICI
(c) CII's Task Force
(d) UTI
28. The above report was based on the draft report prepared by--
(a) Dr. Goswami
(b) FICCI
(c) Dr. CV Alexander
(d) Mr Kumaramangalam
30. Desirable Corporate Governance: A Code (DCGC) recommends that the full board.
should meet minimum of following items--
(a) Six times a year
(b) Once a year
(c) Twice a year
31. The National Task Force on Corporate Governance (set up by CII) was headed by --
(a) Dr. Goswami
(b) Mr. Rahul Bajaj
(c) Dr. Omkar Goswami
(d) Mr C K Birla
32. The word "value" is derived from the French /Latin word--
(a) Valeo
(b) Vaelram
(c) Valoir
(d) Valer
33.A value is a ----------------- concept-- ( choose the word most suited to fill the blank )
(a) Behavioral
(b) Perceptual
(c) Management
(d) Decision
35. The ethics of Corporate Governance is therefore the determination of what is right
proper and----
(a) Good
(b) Pleasing
(c) Just
(d) Practical
37. The subject of business ethics is multi- leveled. The three levels normally considered
are individual, organization and ---
(a) Government
(b) Society
(c) Industry
(d) Business
39. Ethical issues are truly managerial dilemma they represent a conflict between an
organization economic performance and its--
(a) Reputation
(b) Growth
(c) Social / ethical performance
(d) Employees job satisfaction