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NEW DELHI, Sept. 24

THE Federation of Indian Chambers of Commerce and Industry (FICCI) today called for a relook at the existing norms for corporate governance to ensure better compliance of corporate standards.

"To achieve better compliance of corporate standards, there is a need to have a less rule-based environment and a more spirit-based environment," Mr R.S. Lodha, President, FICCI, said.

Speaking to newspersons here on Tuesday, Mr Lodha said that FICCI is actively supporting the move to set up an Institute of Corporate Governance.

The proposed institute is for better compliance with established norms, he said. It will endeavour to provide training in corporate governance norms to directors, accountants, investment bankers and consultants working in the corporate sector, besides trying to simplify the data regularly disclosed by companies.

``FICCI has proposed corporate sector participation in setting up such an institute to improve the corporate governance standards being followed in India at present. If the Department of Company Affairs (DCA) agrees to the proposal, industry would be happy to participate in it,'' he said.

Mr Lodha said the need for establishing such a body was being felt to prevent recurrence of corporate governance lapses.

Companies, he said, regularly disclose a mass of data, including details of its financial performance. Such data, however, are rarely understood by the common investor, and sometimes it goes beyond Chief Financial Officers too, he said.

``We need to simplify these data so that it can be easily understood. This will enable us to better enforce corporate governance practices,'' he said.

Also, greater transparency is needed in the decision-making process of Corporate India, which will, in turn, lead to better disclosures and hence, better corporate governance, Mr Lodha said.

``Take for example, the non-executive directors appointed by companies. These people could be on the boards of as many as 15 companies at a time or even more. The data on each company they deal with, is many times inadequate,'' Mr Lodha added.

The FICCI President also spoke in favour of the move by the market regulator to bring in a rating model for corporate governance.

Mr Lodha said that FICCI is hosting the Third International Conference on Corporate Governance in association with the Centre for Corporate Governance and the World Council for Corporate Governance. The three-day meet begins on September 26.

Elaborating on the issues to be discussed in the seminar, Dr Madhav Mehra, President, World Council for Corporate Governance, noted that how good governance practices can improve transparency, integrity, equity, accountability and responsibility would be examined at the conference.

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