Governance

Strategic fit of IT Service Management the crucial role that IT (Information Technology) plays in businesses today, IT departments have a significant responsibility to ensure that its value is optimized. IT optimization can be obtained through the adoption of the IT Service Management proposition by IT operations. G Pietro Della Peruta However, IT Service Management concepts and tools are complex changes to introduce to an organization.

To achieve the right fit of such concepts and tools it is important that the introduction is congruent with the company’s operating model. The Company Operating Mode concept was introduced in the seminal work of Nolan and McFarlan on the “IT Strategic Impact Grid”. According to the IT  by the business have business Strategic Impact Grid, ing a low strategic depending companies operate in Low  on IT which has high four possible modes: strategic impact.

Firms in Turnaround Strategic

High support, turnaround, facturn around mode expect a IT Governance Focus IT Governance tory, and strategic. This new system to change their on system s and Governance modes determine the on business. New systems prom applications.

IT operations are car service and system management business. To optimize the tion to efficiency, and they Legenda IT Management Mode value of IT, for each are mostly process-driven. Business Focus System Focus Company Operating Mode Company Operating Mode, The IT operations focus is on Focus of IT a well-defined level of IT systems with attention to operations service management ( IT governance processes (i. e. service management mode) needs to be implemented ITIL). y the IT operation. The IT service management model is Strategic mode is characterized by IT having high state characterized by the focus of IT operation (i. e. system gic dependence and high strategic impact on the busy focus or business focus) and by the scope of IT operations ness. Firms in this mode require dependable systems and (i. e. management focus or governance focus). When a must exploit emerging technologies to hold their company’s currently adopted IT management mode petitive position.

IT operations are seeking effectiveness does not match the operating mode the company is in, and efficiency. IT operations focus is on managing bust the IT department must modify the way IT services are ness service from a business point of view (effectiveness) managed in order to optimize the value of IT. as well as using a process-driven approach to manage Support Mode is characterized by IT having low strategic the IT (efficiency). This means IT governance and business impact on the business which has a low strategic disservice focus. tendency on IT. Companies in support mode are least dependent on IT. In this mode, systems operate mostly in About the Author: Pietro Della Peruta is an Executive IT Archimaintenance mode. Service interruption might not protect, IBM Software Group, a member of the IBM Academy of duce serious consequences. For a company in support Technology, and has 20 years of experience in systems mode, systems and applications are monitored and some availability and performance management. est practices exist for recovery from performance and availability problems. IT operations are focused on systems and application resources, and the scope of operations is management.

Factory mode is characterized by the business having high strategic dependence on IT which has low strategic impact. Companies in factory mode are more dependent on information technology. If systems fail for a minute or more, there is an immediate loss of business. Increased response time has consequences for both internal and external users. IT management in the factory mode is characterized by a high level of effectiveness via tailored control of business service quality. KPIs (key performance indicators) are defined at the business level more than at IT level. IT operations have a business focus but still a management scope. In factory mode, the focus of IT operations is more on managing the business services than on the systems or the applications as single entities. For more information please visit the Academy web site.

The most and best known functions of the project management office is to help individual projects. Though if these roles are supported by organization -based purpose then the involved PMO will be an efficient, more productive and profit making one and will be able to accomplish more and essentially it will be able to make room for a viable improvement of the organization. The level of involvement in project execution and the roles to be executed are decided by the aims and purposes of the PMO and by use of the project management tactics, project management tools and projects management principles.

The most visible roles of a project management office is expanding, documenting, assembling and distributing the excellent practices in project management. This part of reports will be constantly updated, to enable the consecutive project to be as a result of the lessons learnt from the prior projects. The PMO centers on incorporating constructive project performances, encouraging the use of required equipments and models, and offering directions and advice. Project related roles incorporate include staff enrolling, advising, and tutoring.

Enterprise –oriented tasks include teaching, apparent housing, project chronological data, issuing best tutoring, support the project management line of work. The major categories under this include-: Practice management, infrastructure management, resource incorporation management, mechanical support management and business alignment. Practice management Majorly, in organization –related roles the project management office is the crucial spot for project management development and augmentation. This task is accomplished by not only offering tutoring in all project management areas but also by setting up the best practices.

This is the responsibility of the PMO. Resource integration The main areas of resource integration cycles around training and education, team development, and resource managment. PMO acts as a resource pool for professionalism in projects thus building knowledge, skill and competence in project management. Failure to this, an organization does not have proper resource allocation development. Technical level man agent. It emphasizes on project planning, project recovery, project auditing and project mentoring. PMO appoint a competent professional leader who will over see the work of a project.

In project auditing, the project is assessed to ensure its completion is timely as planned and run within the budget. Business alignment Main purposes in these areas are business performance management, customer relation and project portfolio management. PMO practices all form of improvement and monitoring viewpoints that stipulate the project. Infrastructure management It dwells on project assessment and project governance, providing infrastructure facilities, organization instructions and providing equipment.

In organizational instruction, project management requires a culture change where management supports the project management office. PMO and project governance Project governance entails the principle of governance in both management of individual projects and at business level. Governance does not adapt the use of project tools and also work in prevailing conditions of structure in PMO. Project governance focuses on • Project response to enable decision making • Level of involvement for stakeholders • Value decisions (functionality/budget/schedule) made • The project organization for efficient resource utilization

• The accountability for information reported to oversight the project Most companies are mounting project governance structure which is different from the old structure which defines responsibility for strategic decision making and accountability across the project. When project governance is executed well, it enhances the result on speed of decision making and quality of projects. There are there major types of types of project management offices; 1. Supportive PMO: It generally gives support in form of expertise, access to information and best practice.

This only works in companies where projects are done effectively in a slack controlled mode. 2. Controlling PMO: This is where project management office of a company offers to brings development and how it implements on project, and secondly, PMO has sufficient managerial hold up to control PMO. 3. Directive PMO: This provide resources and experience to manage the project, it assures high level of reliability of practice in all project. This bring in professionalism into the projects and because each of the project managers derive and reports back the directive PMO.

Corporate governance issues have attracted considerable attention, debate and research world wide in recent decades. Almost invariably, such efforts gain momentum in the wake of some major financial scam or corporate failure, as these tend to highlight the need for tighter surveillance over corporate behavior. Corporate governance has wide ramifications and extends beyond good corporate performance and financial propriety though these are no doubt essential. In India also, corporate governance has been under scrutiny and is an issue that has gained widespread importance.

No one can agree exactly how corporate governance should be incorporated in a company’s strategy. Different people have different definitions of corporate governance. The dictionary meaning of governance includes both ‘the action or manner of governing’ and ‘a mode of living, behavior, and demeanor’. Corporate governance is essentially concerned with the process by which companies are governed and managed. It is a set of standards, which aims to improve the company’s image, efficiency, effectiveness and social responsibility.

The concept of corporate governance primarily hinges on complete transparency, integrity and accountability of the management, with an increasingly greater focus on investor protection and public interest. A key element of good governance is transparency projection through a code of good which incorporates a system of checks and balances between key players – board, management, auditors and shareholders. In the debate concerning the impact of corporate governance on performance, there are basically two different models of the corporation, the shareholder model and the stakeholder model.

In its narrowest sense (shareholder model), corporate governance describe the formal system of accountability of senior management to shareholders. According to the model the objective of the firm is to maximize shareholder wealth. The criterion by which performance is judged in this model is the market value (i. e. shareholder value) of the firm. Therefore, managers and directors have an implicit obligation to ensure that firms are run in the interests of shareholders.

In its widest sense (stakeholder model), corporate governance emphasis contributions by stakeholders that can contribute to the long term performance of the firm and shareholder value, according to the traditional stakeholder model, the company is responsible to a wider constituency of stakeholder other than shareholders. Other stakeholders may include contractual partners’ such as employees, suppliers, customers, creditors, and social constituents such as members of the community in which the firm is located, environmental interests, local and national governments, and society at large.

This view holds that corporations should be “socially responsible” institutions, managed in the public interest. According to this model performance is judged by a wider constituency interested in employment, market share, and growth in trading relations with suppliers and purchasers, as well as financial performance. The problem with the traditional stakeholder model of the firm is that it is difficult, if not impossible, to ensure that corporations fulfill these wider objectives. The corporate governance framework in many countries of the world, is largely inward-focused.

It, therefore, speaks mainly of the composition of management structure at various levels, the assumption being that the structure will automatically ensure quality of delivery. Further, a corporate responsibility to the external environment, its constituents, and other stakeholders has not received the attention it deserve in recommendations of many of the committees set up on corporate governance in different parts of the world. All corporate governance systems depend on key principles: fairness and integrity, transparency and disclosures, accountability, equal treatment to all shareholders and social responsibility.

The challenges of upholding these principles depend upon the ownership structure of the corporate sector. There are two general types of corporate ownership structure: “Insider” (concentrated) and “Outsider” (dispersed). In the concentration ownership structure, ownership control is concentrated in the hands of a small number of individuals, families, holding companies, banks or other financial companies. In concentrated ownership structures, insiders exercise control over companies in several ways. A common feature is where insiders own the majority of company’s shares and voting rights.

Most countries, especially those governed by civil laws, have concentrated ownership structure. In dispersed ownership structure, there are many owners, each of whom holds a small number of company’s shares. Small shareholders have little incentive to closely monitor company’s activities and tend not to be involved in management decisions or policies. Common law countries such as United Kingdom and United States tend to have dispersed ownership structure. Each ownership structure has corporate governance challenges. Need and Importance

The need and importance of Corporate Governance can best be conveyed with the following quotation of Benjamin Franklin: “A little neglect may breed great mischief – for the want of a nail, the shoe was lost; for the want of a shoe, the horse was lost; for the want of a horse, the rider was lost; and for want of a rider, the battle was lost. ” The absence of good corporate governance, even in a company that is performing well financially, may imply vulnerability for the shareholders because the company is not optimally positioned to deal with financial or management challenges that may arise.

Good corporate governance is an essential part of well-managed, successful business enterprise that delivers value to shareholders. Practices that better protect investor interests can only strengthen the capital markets. Negligence in adhering to effective entities; the collapse of BCCI Bank and the epidemic of Securities Scams in India are full fledged examples of disasters resulting from defiance and negligence of the principle of corporate governance.

Corporate Governance extends beyond corporate law. Its fundamental objective is not mere fulfillment of the requirements of law but in ensuring commitment of the Board in managing the company in a transparent manner for maximizing long term shareholder value. Effectiveness of corporate governance system cannot merely be legislated by law. While enough laws exit to take care of many of these investor grievances, the implementation and inadequacy of penal provisions have left a lot to be desired. Read about Corporate Governance at Wipro

The real onus of achieving the desired level of corporate governance thus lies in the proactive initiatives taken by the companies themselves and not in the external measures. Genesis Abroad The modern trend of developing corporate governance guidelines and codes of best practice began in the early 1990’s in the U. K. , the U. S. and Canada in response to problems in the corporate performance of leading companies, the perceived lack of effective board oversight that contributes to those performance problems and pressure for change from institutional investors.

The Cadbury Report in the U. K. , on 1992, defined corporate governance as “the system by which organizations are directed and controlled”, became a pioneering reference code for stock exchange both in U. K. and abroad. General Motors Board of Directors Guidelines in the U. S. and the Dey Report in Canada has also proved to be influential sources for guideline and code initiatives adopted by other countries. In the U. K. in July 2003, the Financial Reporting Council (FRC) of the U. K. published the new Combined Code.

The U. K Code (2003) was based on the proposed revision of the Combined Code (1998) in the report by Derek Higgs on the role and effectiveness of non-executive directors, which incorporated the recommendation on audit committees by Robert Smith. The most significant changes in the Code are the expanded definition of director independence, an increase in the recommended proportion of independent directors from one-third to a majority of the Board for larger listed companies, and separate Chairman and CEO with the Chairman being an independent director.

There are also clearer specifications of non-executive directors’ duties, an increased role and more stringent guidelines on membership of the Audit Committee, as well as an increase emphasis on the need for internal audit and control functions. Further, the new code allows for some differences in corporate governance arrangements for larger and smaller companies, particularly pertaining to the number and proportion of independent directors on the Board and number of members on certain Board committees.

Following various other committee recommendations in different countries of the world, King’s Committee in South Africa, there have been efforts in the last decade to homogenize the code of Corporate Governance, particularly in listed Companies. In the U. S. in 1998, the NYSE and NASD sponsored a committee to study the effectiveness of audit committees. This committee became known as the Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit Committee (“Blue Ribbon Committee”). In its report, the Blue Ribbon Committee recognized the importance of audit committee and issued ten recommendations to enhance their effectiveness.

In response to these recommendations, the NYSE and the NASD, as well as other exchanges, revised their listing standards relating to audit committees. In 2002, the Sarbanes-Oxley Act was passed in response to a number of major corporate and accounting scandals involving prominent companies in the United States. This Act is considered to be one of the most significant changes to federal securities laws in the United States. An interesting aspect in the Sarbanes Oxley Act is the protection to whistleblowers.

The OECD Principles of corporate Governance, originally adopted by the 30 member countries of the OECD in 1999, have provided a good insight into corporate governance framework at a macro level. Following an extensive review process that led to adoption of revised OECD Principles of Corporate Governance in 2004, they now reflect a global consensus regarding the critical importance of good corporate governance in contributing to the economic validity and stability of below reflects not only the experience of OECD countries but also that of emerging and developing economies.

OECD Principles of Corporate Governance:

1. Ensuring the basis for an effective corporate governance framework: The corporate governance framework should promote transparent and efficient markets, be consistent with the rules of law and clearly articulate the division of responsibility among different supervisory, regulatory and enforcement authorities.
2. The rights of shareholders and key ownership functions: The corporate governance framework should protect and facilitate the exercise of shareholders’ rights.
3. The equitable treatment of shareholders: The corporate governance framework should ensure the equitable treatment of all shareholders, including minority and foreign shareholders. All shareholders should have the opportunity to obtain effective redress for violation of their rights.
4. The role of stakeholders in corporate governance: The corporate governance framework should recognize the right of stakeholders established by law or through mutual agreements and encourage active cooperation between corporations and stakeholders in creating wealth, jobs and the sustainability of financial sound enterprises.
5. Discloser and transparency: The corporate governance framework should ensure that timely and accurate disclosure is made on all material matters regarding the corporation, including the financial situation, performance, ownership and governance of the company.
6. The responsibilities of the board: The corporate governance framework should ensure the strategic guidance of the company, the effective monitoring of management by the board, and the board’s accountability to the company and the shareholders. Genesis in India In India, the Companies Act, 1956 was the principle legislation providing the formal structure for corporate governance.

Apart from this, the Monopolies and Restrictive Trade Practices Act, 1969, the Foreign Exchange Regulation Act,1973 (which has now been replaced by Foreign Exchange Management Act,1999), the Industries (Development and Regulation) Act, 1951 and other legislation also have a bearing on the corporate governance principles. Till May 1992, the office of the Controller of Capital Issues was the regulation authority for the capital market. Therefore, the Securities and Exchange Board of India has assumed a primary role in this regard.

The experience after about five decades of the revamped Companies Act, 1956, confirms the fact that the law can never be the promulgator of excellence but it can only provide that too with a wavering zeal for enforcement, for bare minimum standards of responsibility of corporate arrangements towards the shareholding community. The number of sick industrial companies with the Board for Industrial and Financial Reconstruction (BIFR) provides ample testimony to the failure of minimal standards of corporate performance, leave alone governance.

The entry of Indian, as well as foreign institutional investors, mutual funds, banks and private sector players, also activated the capital market rapidly and a need was realized to do away with large paper work involved in transfers and holding of securities running into crores of rupees. Management exercised their rights to veto transfer of ownership of shares in favors of persons who bought them in the normal course, when they envisaged a threat to the existing management. The depositary legislation of 1996 abridged this right by deleting some of the provisions of the Securities Contracts (Regulation) Act and the Companies Act.

This step further established the confidence into the true ownership of shareholding without the fear of the same being declared as benami, bogus or tainted securities in future. It has also improved the capital market scenario and helped the management in serving and protecting the shareholders’ interest, which is one of the most important aspects of Corporate Governance. Developments in India In India, whilst management processes were widely explored, till recently relatively little attention was paid to the processes by which companies were governed.

The various aspects of this issue crept into India after the report of the Cadbury Committee in the U. K. in 1992, which evoked considerable interest from Indian companies. The Confederation of Indian Industries (CII) thereafter published a Desirable Code of Corporate Governance, which some companies voluntarily adopted. The issue came into prominence with the report of the Shri Kumar Mangalam Birla Committee set up by SEBI to suggest changes in the listing agreement to promote governance. Corporate governance has an important role to play as an instrument of investor protection.

The development of the capital market is dependent on good corporate governance without which investors do not repose confidence in the companies. Companies with basic corporate governance principles are more likely to attract investors. Many companies voluntarily established high standards of corporate governance; however, there were many other who did not pay adequate attention to the interest of the shareholders. They did not attend to investor grievances such as delay in transfer of shares, dispatch of share certificates and dividend warrants, non-receipt of dividend warrants.

Besides, capital from the market at very high premium. SEBI initiated several steps for strengthening corporate governance through the amendment of the listing agreement like:

• Strengthening of disclosure norms for Initial Public Offering (IPO) following the recommendations of the Malegam Committee;
• Providing information in directors’ report for utilization and end use of funds and variation between projected and actual use of funds;
• Declaration of un audited quarterly results;
• Mandatory appointment of compliance officer for monitoring the share transfer process and ensuring compliance with various rules, regulations;
• Dispatch of one copy of complete balance sheet to every household and abridged balance sheet to all shareholders. However, SEBI continued to receive a large number of investor complaints daily. To further improve the level of corporate governance, it was felt that a more comprehensive approach was needed at that stage of development of the capital market.

This promoted SEBI to constitute a Committee under the chairmanship of Shri Kumar Mangalam Birla, member, SEBI Board to suggest changes in the Listing Agreement to promote Corporate Governance. The terms of reference of the Committee were as follows:

To suggest suitable amendments to the listing agreement executed by the stock exchanges with the companies and other measures to improve standards of corporate governance in listed companies, in areas such as:

• Continuous disclosure of both financial and non-financial material information,
• Accounting information,
• Manner and frequency of such disclosure,
• Responsibilities of independent and outside directors.

To draft a code of corporate best practices; and To suggest safeguards to be instituted within companies to deal with insider information and against trading. The Committee’s report was made public. Board on the recommendations of the Committee and the feedback received, the SEBI Board at its meeting held on January 25, 2000 considered the recommendations of the Committee and decided to make amendments to the Listing Agreement in pursuance of these recommendations.

It was advised that a new clause, namely clause 49 be incorporated in the Listing Agreement covering the following primary areas:

• Board of Directors (specifying a minimum number of independent directors and board procedures)
• Audit Committee (introducing the mandatory requirement of an audit committee and its roles and responsibility)
• Directors’ remuneration (disclosure of Directors’ remuneration)
• Disclosure (mandatory Management Discussion and Analysis section in Annual Report and other disclosure)

Broadly, eight points on which provisions were included:

1.  Board of Directors and its composition
2. Audit Committee
3. Remuneration of Directors
4. Board Procedure
5. Management Discussion and Analysis Report
6. Shareholders/Investors Grievance Committee and other shareholders’ issues
7. Report on Corporate Governance
8. Certificate of Compliance. The Naresh Chandra Committee (2002)

In august 2002, the Department of Company Affairs (DCA) under the Ministry of Finance and Company Affairs appointed a High Level Committee, under the Chairmanship of Naresh Chandra, former Cabinet secretary “to examine the Auditor-Company relationship, role of independent directors, and disciplinary mechanism over auditors in the light of irregularities committed by companies in India and abroad”. The Committee was also mandated to examine the concepts of CEO/CFO certification newly introduced by the recently passed Sarbanes-Oxley Act in the U. S.

The Narayana Murthy Committee (2003) In late 2002, SEBI, having analyzed the disclosure made by companies under Clause 49 and after a review of a large number of company annual reports, observed that there was considerable variance in the extent and quality of disclosure made by companies in their annual reports and concluded that there was a need to review the extent and quality of disclosure made by companies in their annual reports and concluded that there was also a need to review the existing code on corporate governance to: • Assess adequacy of existing practices, and Suggest improvements to the existing practices. Thus, the SEBI Committee on Corporate Governance was constituted under the Chairmanship on N R Narayana Murthy to look into these matters. The Narayana Murthy Committee report (February 2003), reviewed existing best practices in corporate governance and also drew upon the recommendations of the Kumar Mangalam Birla Committee and the Naresh Chandra Committee to recommend further improvements in the existing system of corporate governance applicable to Indian companies.

The Revised Clause 49 In October 2004, SEBI amended Clause 49 of listing agreement in alignment with the recommendations of the Narayana Murthy Committee. These changes primarily strengthened the requirement in the following areas:

• Board composition and procedure
• Audit committee responsibilities
• Subsidiary companies
• Risk management
• CEO/CFO certification of financial and internal controls
• Legal compliance
• Other disclosure

Since a large number of companies were not in a state of preparedness to be fully compliant with the requirements of the Revised Clause 49, it was felt that more time should be allowed to them, to confirm to the provisions of the Revised Clause 49. Accordingly, SEBI has extended the date for ensuring compliance with the Revised Clause 49 of the Listing Agreement to December 31, 2005.

The rise and fall of the Royal Bank of Scotland is characterized by poor corporate governance which allowed for the complete dominance of the executive management over the board of directors and a massive principal-agent problem. Positive social dynamics and the power of weak ties allowed for compliance while intimidation and bullying tactics silenced questions, concerns and opposition.

The board’s utter compliancy and borderline negligence enabled rampant, unchecked empire-building at the cost of shareholder value and led to a spiral of unaccountability and gross incompetence. Stakeholders’ loss of confidence from misinformation and misdirection was an inevitability that sealed RBS’s fate. The Royal Bank of Scotland (RBS) Group is a publicly traded firm that began its ascension as a global banking entity under the leadership of Sir George Mathewson1. In 2000 RBS was able to secure a hostile of the National Westminster Bank2,3 leading Mathewson to seek a successor to lead the integration of NatWest.

He found one in his then-deputy CEO Fred Goodwin. There are two main corporate governance issues associated with this turnover in leadership. First of all, the issue of succession. The board is responsible for appointing the CEO4, yet it is obvious Mathewson had significant influence in the decision5. The board exists to avoid principal-agent problems and appointing a value-creating CEO is an important task yet here we see them taking an auxiliary role in the succession process. This was not immediately problematic as Goodwin seemed a reasonable choice

however it set the tone for the firm’s dynamics early on. The second and more concerning corporate governance issue was Mathewson’s transition to chairman of the board. As CEO the firm had Goodwin, a hand-picked similarly-expansion-minded6,7 successor to Mathewson, being monitored by Mathewson himself as chairman8. The board’s ability, or perhaps desire, to curtail the actions of executive management was severely impaired with this decision. 1 “George Mathewson. ” Bloomberg Profiles.

<http://www. bloomberg. com/profiles/people/1520726-george-ross- mathewson>. Accessed 16 November 2014. Online. 2 Dey, Iain andKate Walsh. “How Fred shredded RBS. ” Sunday Times. 8 February 2009. <http://www. thesundaytimes. co. uk/sto/business/article148906. ece>. Accessed 17 November 2014. Online. 3 Inside The Bank That Ran Out Of Money. Colin Murray. BBC, 2011. Film. 4 “Corporate Governance” RBS. <http://www. rbs. com/about/corporate-governance. html>. Accessed 17 November 2014. Online. 5 Inside The Bank That Ran Out Of Money. Colin Murray. BBC, 2011. Film.

Economic development can also refer to as being quantitative and qualitative changes in the economy. Such actions might involve multiple areas including development of human capital, critical infrastructure, regional competitiveness, environmental sustainability, social inclusion, health, safety, literacy, and other initiatives. Economic development differs from economic growth. Whereas economic development is a policy intervention endeavourer with aims of economic and social well-being of the people, economic growth is a phenomenon of market productivity and rise in GAP (gross domestic product).

According to Mammary Seen, “economic Roth is one aspect of the process of economic development. ” Despite the good performance of Bangladesh in terms of many growth indices, it has been lagging behind in building a necessary infrastructure for achieving goals for the country to be treated as a middle-income one. Economic governance embraces all macroeconomic, microeconomic and fiscal policies, public economic agencies, regulatory bodies, company laws and legal institutions connected with economic matters.

Good governance means an efficient, open, accountable and audited public service, which has the bureaucratic competence to help design and implement appropriate public policies and, at the same time, an independent Judicial system to uphold the law. Good governance is a system of governance that is able to unambiguously identity the basic values to society, where values are economic, political and socio- cultural issues including human rights, and pursue these values through an accountable and honest administration. It is obvious that good governance is a must for the development and growth of a nation.

Good governance generally implies a number of institutions, which regulate the behavior of public bodies, stimulate citizens’ participation in government and control public-private relations. Governance is government plus the private and third (not for profit) sectors. In the 1992 report titled “Governance and Development”, the World Bank gave its definition of good governance. Good governance is defined as “the manner in which power is exercised in the management of a country’s economic and social resources for development”.

In an October 1995 policy paper called “Governance: Sound Development Management”, the DAB outlined its policy on this topic. Further, in a separate opinion issued by the DAB General Council, it was explained that governance has at least two dimensions: (a) political (e. G. , democracy, human rights); and b) economic (e. G. , efficient management of public resources). The United Nations Development Programmer’s (UNDO) definition of good governance is spelled out in a 1997 UNDO policy document titled “Governance for Sustainable Human Development”.

The document states that governance can be seen as the exercise of economic, political and administrative authority to manage a country’s affairs at all levels. The key elements of good governance as defined by UNDO are listed below: Participation: Participation by both men and women is a key cornerstone of good governance. All men and women should have a voice in decision making either erectly or through legitimate intermediate institutions that represent their interests. Rule of law: Legal frameworks should be fair and enforced impartially, particularly the laws on human rights.

Transparency: Transparency is built on the free flow of information. Processes, institutions and information are directly accessible to those concerned through it, and enough information is provided to understand and monitor them. Responsiveness: Good governance requires that institutions and processes try to serve all stakeholders within a reasonable timeshare. Consensus orientation. There are several actors and as many viewpoints in a given society. Good governance requires mediation of different interests in society to reach a broad consensus on what is in the best interest of the whole community and how this can be achieved.

Equity: All men and women have opportunities to improve or maintain their well- being. Effectiveness and efficiency: Good governance means that processes and institutions produce results that meet the needs of society, while making the best use of resources at their disposal. Strategic vision: Leaders and the public have a broad and long-term perspective on good governance and human development, along with a sense of what is needed for such development. There is also an understanding of the historical, cultural and social complexities, in which that perspective is grounded.

The rule of law as gauged by the responses to ‘efficient functioning of Judiciary’ indicates that most low and middle-income countries rate it as a much higher obstacle than their high-income counterparts. The aggregate average of street crime, organized crime, and corruption are all higher in these countries than in the developed world. There are many problems that come up as barriers to good governance. To ensure sound local development, action should be taken to work towards achieving good governance. The legal policy regime of a country provides base to the potential Foreign Direct Investment (FED).

Unequivocal, neutral legal framework and better protection of property rights can lead to higher FED. The legal and regulatory environment does matter for financial development. Countries with legal and regulatory systems that give a high priority to creditors receive the full value of their claims on cooperation, have better- functioning financial intermediaries than countries where the legal system provides much weaker support to creditors. Bangladesh is the seventh largest country in the world in terms of its population and owe it is treated as ‘N-1 1 ‘ after the BRICKS countries.

However, without progress in legal arenas, such as making suitable laws and their appropriate execution, speedy resolution of all corporate and financial disputes, and quick and transparent transfer of properties, some vital sectors of Bangladesh economy may suffer irreparable loses. Like the infrastructural development, improvement of legal mechanism can now be regarded as the most important precondition for sustainable growth, a stronger economy, and pro-people system of governance. The writer is pursuing PhD at the Open University, Malaysia. shah@banglachemical. Com

Direction We strive to be a safety leader in our industry, a world-class operator, a responsible corporate citizen and a great employer. We are working to enhance safety and risk management, earn back trust and grow value. Keeping a relentless focus on safety is a top priority for us.

Good management of risk helps to protect the people at the frontline, the places in which we operate and the value we create. We understand that operating in politically-complex regions and technically- demanding geographies, such as deep water and oil sands, requires particular sensitivity to local environments. We continue to enhance our systems, processes and standards, including how we manage contractors. ( Bp ” ‘ , 2012) Situational Analysis Mitigate and eliminate situations that put the company at risk. Goal transparency is key to building trust and relationships.

Simplify goals so interpretations are clear Have a broader presence in the communities we serve. Communicating is key to building trust and relationships. Alternatives Mistrust by the community Lack of generated revenue Increased injuries to our team Lack of knowledge regarding BP Misconceptions regarding BP Possible increase revenue by the competition Goals Recognize potential for our presence to impact the lives of indigenous communities. Sensitivity to community displacement as a result of our company projects. Complete Revenue transparency with governments, nongovernmental organizations and international agencies.

Manage environmental sensitivities and the potential impacts on communities. Create a culture of Safety. Oversight Day-to-day risk identification and management occurs in the group operations and functions, with the approach varying according to the types of risk we face. Oversight and governance occurs at board, executive and function levels to help foster effective group-wide oversight, business planning and resource allocation, intervention and knowledge sharing.

People need many natural resources to live. Other natural resources are used to make life easier. Defining Global Governance Governance is the framework of social and economic systems and legal and political structures through which humanity manages itself. ” World Humanity Action Trust, 2000. Environmental governance “is the term we use to describe how we as humans exercise our authority over natural resources and natural systems. ” It is about questions concerning “how we make environmental decisions and who makes them…. Using this broad conceptualization, environmental governance involves much more than the work of governments. It “relates to decision-makers at all levels-?government managers and ministers, business people, property wieners, farmers, and consumers. In short, it deals with who is responsible, how they wield their power, and how they are held accountable. ” In discussions of governance, three terms come up often: Institutions. In the context of governance, “institutions” can be thought of as the formal and informal rules that govern social interactions.

Formal rules are illustrated by laws and regulations, and informal rules are illustrated by social norms. Good governance. This term is used to describe governance characterized by high levels of transparency, accountability, and fair treatment. Civil society. This term “refers to the arena of uncovered collective action around shared interests, purposes and values. In theory, its institutional forms are distinct from those of the state, family and market, though in practice, the boundaries between state, civil society, family and market are often complex, blurred and negotiated.

Civil society commonly embraces a diversity of spaces, actors and institutional forms, varying in their degree of formality, autonomy and power. Civil societies are often populated by organizations such as registered charities, development non-governmental organizations, community groups, women’s organizations, faith-based organizations, professional associations, trades unions, self-help groups, social movements, business associations, coalitions and advocacy group. ” Why Reform?

Nature of problems Scale, scope and complexity Failed collective action Lack of incentives for collaboration Fragmentation Institutional proliferation Deficient authority Inadequate mandate, funding, political support Insufficient legitimacy Lack of process and outcome fairness What to Reform? Institutional structure re’s Institutional methods of governing What to Achieved? Improved problem solving Improved collective action Enhanced legitimacy Strengthened policy space Improved fairness New global ethic How to Reform?