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.
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
1. Essence of Corporate Governance is--
a) Effective accountability
b) Good management
c) Codes of conduct
d)Transparency
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