Corporate Governance
APAS provides a wide range of specialized advisory services designed to help strengthen companies by improving corporate governance. APAS’s corporate governance experts can offer to companies:

• Consultations
• Delivery of customized workshops
• Corporate governance assessments and improvement plans

After having obtained the assent of the President of India on 29 August 2013, Companies Act, 2013 (new Companies Act) came into force on 12 September 2013. The erstwhile Companies Act, 1956 was in existence for well over fifty years and was lately seeming quite ineffective at handling present day challenges and the complexities related with the growing stakeholders’ interests. The new Act promises to substantially raise the bar on governance and in a comprehensive form purports to deal with some very relevant themes. At the same time, it appears to be quite pervasive and thrusts greater responsibility and obligation on the Board of Directors and Management in Indian companies.

Keeping with the wider director and management responsibility, greater investor protection aspects of the new Companies Act, the Companies are in the process of redefining the boards and processes related to governance and APAS can assist companies in this regard.

APAS will provide detailed assessments of the organization’s corporate governance structures and practices including on-site interviews. APAS assesses corporate needs and achievement in the following key areas:

• Commitment to good corporate governance
• Board structure, processes and functioning
• Performance evaluation frameworks and effectiveness assessments
• Regulatory compliance assistance; Transparency and disclosure
• Succession planning
• Board training

Companies will receive a tailored improvement plan that includes proposals to address corporate governance weaknesses and suggested methods for prioritization of suggested improvements.

Board Training
Aftermath of the global financial crisis and numerous corporate scandals lead to erosion of trust on boards and has shifted the focus on to the boardrooms increasing the pressure on the board members. Increased levels of scrutiny from the shareholders and regulators have made the job of board members more challenging. Companies are now in need of board members who fully understand their responsibilities and challenges, comply with the regulations, effectively handle risk and manage crisis while delivering strategic counsel. Succession planning, management evaluation and effective communication with the shareholders are some of the other prime areas that require board members’ attention.

In this context, TRBA board trainings help the boards equip themselves with all the required skills and knowledge. TRBA board trainings are highly specialized training programs delivered to the company boards to ensure that the contribution of board is maximized and positive board culture is maintained. The trainings are case-study based and provides tools and frameworks to increase the performance of boards. TRBA Training touches upon the current trends and issues in the boardrooms. It encompasses various subjects including

• Corporate governance best practices
• Board standards, roles, relations and processes
• Risk Mitigation and internal controls
• Crisis management
• Succession planning
• Performance metrics and value drivers
• Use of technology

APAS provides highly effective board trainings through TRBA platform. TRBA is Thomson Reuters Board Academy that delivered courses in in 19 different languages – to more than 500 clients and 600,000 users globally. The training offerings cover a wide range of topics in categories such as Induction and Awareness, Financial Crime, Business Conduct and Governance and Risk Management. Additionally, courses are tailored to geographic regions and are available for U.K. and Europe, North America, Asia Pacific, and the Middle East. APAS now constituted Thomson Reuters Board Academy for India. For India, TRBA engaged global and domestic experts and thought leaders to customize the global training material to Indian banking needs. The material has been developed for the Indian banking company boards and is specifically aligned to the needs of the public sector banks in India. The domestic experts have been drawn from the regulator’s office, former CEOs & CMDs of the banking companies, reputed practitioners, and Academicians.

ESG

Sustainable growth, in the context of environmental social and governance is gaining increasing attention from all the stake holders of businesses and particularly so for BFSI companies. Policy makers, regulators, investors, consumers, and employees are all concerned about sustainable businesses from their own perspectives. Regulators worldwide are evolving regulations in the areas of ESG and the policy makers are keen to direct national resource towards sustainable investments with long term benefits to the economy. There is an increasing pressure from within the corporates and without to evaluate sustainability from the perspective of all the three pillars – environment, social and governance. ESGs ratings are now evolving with parameters around the three pillars and ESG scores are gradually becoming one important factor for the stake holders.

ESG scores are evolving and presently have more qualitative parameters and therefore are subjective, but the direction is now gradually taking shape this will, with corporates coming forward to get themselves evaluated and the regulatory framework will become sharper.

Though there is little relationship between ESG scores and profitability and financial performance of businesses presently it will over a period of time have a larger influence on the performance of corporates. Five major factors of business values of a corporate will influence both the scores as well as the performance. All these factors examine sustainability of the corporate and include –

• Top-line growth. Consumer would prefer buying goods from ethical manufactures (governance and social – consumers will not buy blood diamonds, for instance) or policy makers will increasingly encourage green energy and its user corporates.

• Cost. Financial lenders and investors will invest in sustainable businesses who have long term existence or survival, and consumers will prefer brands who have been in business for longer.

• Regulatory relationship. Corporates with good governance and compliance record will survive longer and will be preferred by a stakeholder.

• Talent. Employees would like to work for businesses which are sustainable in terms of the three pillars.

• Resource optimization. Shareholders and other investors will prefer companies with long term future and so will the financial lenders. From investment management and capital management perspective corporates with demonstrated sustainability will enjoy long term resource availability.

Thus, there will be an increasing relationship between ESG scores and financial performance of businesses in the medium and long term.

APAS provides high level advisory services to corporates in their journey of strengthening the five business values mentioned above at the senior management and board levels.