Navigating the New Era of Corporate Governance
By: Sanjit Kaur Batra, Group Vice President, Cummins India
Sanjit Kaur Batra, is a senior legal professional with diverse experience of working in international agencies, law firms and as an in-house counsel. As a part of the corporate and business leadership teams as well as Board of Directors, she provides strategic inputs for facilitating business growth in complex regulatory environment, strengthening corporate governance, identify and mitigate legal risks, improve legal processes, build talent as well as lead policy advocacy efforts.
In a conversation with Women Entrepreneur Magazine Sanjit Kaur Batra, Group Vice President at Cummins India, shares her views and thoughts on the major constraints in policy formulation, as well as the determinants of corporate divestiture.
According to you, how can corporate governance be a tool to encourage innovation in companies?
A business that has its roots seeded in strong corporate governance focuses on the interests of all its stakeholders, managing its risks, staying competitive and adding value to the ecosystem around it. This not only results in the organisation having strong financials but also helps maintain a strong focus on its innovation pipeline that can help it stay relevant. Being compliant and having good corporate practices also ensures that the organisation avoids being caught up in legal battles and right to operate issues which could result in not only penal and financial consequences but also loss of company’s reputation and confidence of its investors as well as stakeholders. An organisation, whose foundation is on strong corporate principles and governance, attracts and retains talent, which is critical for innovation, whether it is in the form of new ideas, products, services or processes. An independent board, which is a hallmark of robust corporate governance, also brings in an outside in perspective and encourages the company to benchmark itself against leading companies, thus helping the organisation to focus not just on its present but also future strategies.
According to you, what are the major constraints in policy formulation? What are the encountered challenges of policy formulation?
Balancing divergent interests and building a consensus which broadly addresses the concerns of all stakeholders are some of the major constraints in policy formulation. Ensuring balance between government and civil society; business and common people; national and global stakeholders is by no means, an easy feat. Also, one of the biggest challenges for policy formulations is the fact that policies are not being able to keep pace with the changing world and technology. The pace at which the world is evolving calls for an adept and agile policy making processes. Also, while formulating a policy is important, its execution is even more so. Ensuring that a policy, once formulated, can be rolled out and implemented on the ground is a critical aspect of policy formulation and can result in huge challenges being thrown up at time of execution.
How can the implementation of a strong ethics and compliance program help in improving corporate ethics?
Ethics and compliance program is a critical component for sensitising employees about the corporate’s code of conduct and related laws. This program builds a culture which is unbiased, equitable and has zero tolerance for any behaviour which will be against the country’s laws as well as the corporate’s internal policies. Having a strong ethics and compliance program directly translates into the corporate having a robust corporate ethics. It also provides employees and other stakeholders a forum to raise any concerns that they might have, with the assurance that their concerns will be kept confidential, taken seriously as well as will have no retaliatory consequences. Having a strong ethics and compliance program, therefore provides employees with a safe space and builds a corporate culture of ethical behaviour, transparency, and accountability.
According to you, what are the keys to a successful divestiture? What are the determinants of corporate divestiture?
We live in a world where corporate restructuring is the norm in order to align with the ever-evolving corporate vision and business plans. A successful divestiture requires immense planning, coordination among all the stakeholders and a clear plan. The fact that often, these transactions are confidential and have only a small team working on the transaction adds another layer of complexity. The critical piece that is important for a successful transaction is having an experienced cross functional team who is accountable for the structuring and execution of the divestiture. Clear timelines for each milestone along with contingency plans are also of immense importance. In transactions which are global in nature, it is also imperative that the regional and global teams are closely connected and work in tandem. Each jurisdiction has its own nuances, so a cohesive transaction plan has to factor in global as well as regional aspects. Any missteps during such transactions can often result in significant consequences as well as delays for the divestiture.
As a female leader, what has been the most significant barrier in your career? Have you been confronted with gender-related roadblocks in your career?
Mindset, whether my own or anyone else’s, has the potential to be the biggest obstacle in any individual’s career journey. Once we care self-aware about what our priorities are in life, I strongly believe that we have the innate capability to find solutions to the impediments that come in the way. Also, balancing conflicting priorities of a demanding career and the various roles we all play in our personal lives can get overwhelming and challenging at times, but the support system that I have around me, has thankfully, helped me manage it all.
Gender based stereotypes and expectations continue to exist even today and they certainly have the potential to become roadblocks in an individual’s career. However, as long as one has the grit and the focus to set their own course, I do believe, that in the end, people around you accept you for the value that you bring to the table and the team, instead of being focussed on your gender. While the society is certainly evolving to become more equitable, we still have a long way to go before the world truly becomes gender neutral.
(The views expressed in the article belong solely to the author and are not representative of their respective organization.)