Thursday, October 27, 2016

Tata Sons Governance - Chairman Mistry' Ugly Ousting- Why?

         Fanfare Entry And Ugly Ouster Of Commander-in-Chief of Tata Sons                       

               Tata  Sons is symbol of glorifed Indian Private organisation with a 148 years history. Last year, its tunover was in excess of  $100 billion. It has operations in more than 100 countries. It provides job to more than half million. Tata Sons has 66% shares of different tata truts. Cyrus' father Pallonji Mistry has a shares of 18.5 % in it. Rest 15.5 % shares is of different companies.
Cyrus P Mistry took charge of TATA group on December 28, 2012. There are huge excitements and speculations inside and outside the organization. Profit maximization is the motto of a business organization. But it is not applicable to TATA. This makes it different and international brand? A perusal of Tata’s statement endorsed this difference.  
Jamsetji N. Tata (Founder, Tata Group, 1868) said “In a free enterprise, the community is not just another stakeholder in business, but is in fact the very purpose of its existence.”  J. R. D. Tata stated “The Tata philosophy of management has always been and is today more than ever, that corporate enterprises must be managed not merely in the interests of their owners, but equally in those of their employees, of the customers of their products, of the local community and finally of the country as a whole.” 
 In 2005, Ratan Tata, dreamed One hundred years from now, I expect the Tatas to be much bigger than it is now. More importantly, I hope the Group comes to be regarded as being the best in India — best in the manner in which we operate, best in the products we deliver and best in our value systems and ethics. Having said that, I hope that a hundred years from now we will spread our wings far beyond India…” 
Now, search is on Why is Cyrus ousted? There are many speculations and stories around in different media. Then search committee was so impressed with the ideas of Cyrus that they offered the job. During the deliberations to the committee, he had detailed what the structure of the group should look like; he had proposed many new propositions with innovative touch.
Impressed search committee offered Cyrus job of Chairman. But, once he was in the chair, it was a different story. Not only did he not follow through, he went in the other direction. So, First main reason of his ugly ouster is " He failed on Walk to his own Talk- which he put before search committee."
The Second main reason is, he failed to learn governance of Tata. Though Tata is a private commercial identity, but its moto is a mix one- not sole profit making. It carries its social values, culture and ethic all along even at the cost of loss in its 148 years history. Here, Tata Sons is different than other big Indian commercial organisations. And these characters are in the administrative blood and body of TATA and its Brand.                     
 Governance of Tata sons is a judicious mix of both Public and Private styles. Tata is brand because of some of its characteristics and style of public governance in spite of being a purely commercial organisation in look.  No money making at the cost of its values, culture and ethic erosion what is its brand.
 This well cherished governance character of Tata can't be changed over a short period which Cyrus Tried and failed- hence, he is  no more on chair. He ran the administration solely on commercial lines of profit making and ignoring brand characteristics of Tata Sons- Values, Ethic, Culture. As a result, he could not kept and carried all along in his so called team. Finally he left alone and thrown out. 
Governance is a big issue before both public and private managers and actors. Public governance issue has been always in light. Public do not repeat our public repereseatatives if they failed in their promised governance. For the first time, a private sector followed same footsteps by throughing its chairman Cyrus Mistry by a majority decision of the board of Tata Sons. 

Heera Lal ( Views are persoanal based on different sources)


Friday, October 21, 2016

Goa BRICS Provided India - A Forum To Corner Terror

BRICS (B-R-I-C-S) Is Brazil, Russia, India, China, And South Africa
            BRICS stands for an association of five developing and rising economies which includes Brazil, Russia, India, China, and South Africa. Jim O'Neill, the then chairman of Goldman Sachs  Asset Management coined this term BRIC in 2001 in his publication Building Better Global Economic. Initially, South Africa was not associated with it. It joined in 2010 and  BRIC became BRICS as it is formed by the first letters of the member nations in a given sequence.                                                                                                                                               In September, 2006 the foreign ministers of Brazil, Russia, India and China (BRIC) met in New York City. In series meetings, they prepared the required background, modalities, and terms of references to associate.  The first full scale diplomatic meeting held in Yekaterinburg, Russia on June 16, 2009.  Thereafter, BRICS nations are meeting annually at formal summits.  Russia hosted 7th Summit in July 2015. The 8th is in Goa, India.
             BRIC ,the four member club reached consensus on improving the global economic situation and reforming financial institutions as its goal in 2009. They also announced the need for a new global reserve currency. Started with economic mutual interest, the agenda widened manyfold with passage of time.
            Since 2009, BRICS evolved gradually in its successive meetings, held annually in rotation among member nations. Summits held: Brasillia, 2010; Sanya, 2011; New Delhi, 2012; Durban, 2013; Fortaleza, 2014. Consensus evolved on issues can be grouped into two main pillars. One, coordination in multilateral fora with a focus on economic and political governance. Two, cooperation among members.
            In first pillar, the efforts  are being made to reform the global governance institutions- in economic and financial fields. These includes financial G-20, IMF, World Bank along with others. Efforts are on to reform political institutions such as the United Nations.
            In second pillar intra-BRICS mutual cooperation is gaining strong ground. Agenda points have broadened since its inception. Areas of enhanced cooperation comprise finance, agriculture, economy and trade, combating crime and terrorism, science and technology, health, education, corporate and academic exchanges and security are few among many.
            The financial field receives focus as a new front of cooperation. In  the 6th summit in 2014  BRICS singed two financial instruments into a treaty and it became active in 2015. One is creation of New Development Bank (NDB). Two is Contingent Reserve Arrangement (CRA). NDB and CRA signalled a good message about willingness of consolidation and partnership in the economic-financial sector among members.
            The NDB is a multilateral development bank. It is operated by the BRICS states. It aims at financing infrastructure and sustainable development projects in member nations and other developing countries. Initially it would start  with a subscribed capital of 50 billion US dollar- 10 dollar contribution by each member.     
           BRICS CRA is an arrangement for giving protection against global liquidity pressure. It is a fund of 100 billion US dollar. BRICS states will use to sustain short-term liquidity pressure. CRA aims at to contribute to international financial stability, by providing an additional line of defence to the BRICS.  CRA is perceived as a competitor to IMF and NDB is viewed as South-South cooperation.
            India hosted the 8th BRICS Summit in its chairmanship on 15-16 October2016 in Goa. The theme is ''Building Responsive, Inclusive and Collective Solutions." The  9th Summit is proposed in China.
            Five-pronged approach of Goa summit is: Institution building to further deepen, sustain and institutionalise BRICS cooperation;   Implementation of the decisions from previous Summits; Integrating the existing cooperation mechanisms;  Innovation, i.e., new cooperation mechanisms; and  Continuity, i.e., continuation of mutually agreed existing BRICS cooperation mechanisms.
            In short, approach can be captured by ‘IIIIC or I4C’. The focus is on enhanced people-to-people (P2P) contacts of BRICS member states, especially youth. In this context, India has planned activities like U-17 Football Tournament, Youth Summit, Young Diplomats’ Forum, Film Festival etc.
            How was this summit crucial for India? How did it provided additional advantages to tackle spontaneous increase in tension with Pak?  Recent attack in Uri by Pakistan and thereafter surgical strike by India on terror launching pads in Pakistan intensified tensions between Pak and India. India is making an all out effort to isolate Pakistan diplomatically from getting any support on terror issue from any country. India is trying to highlight Pak as terrorist generating country.
            Russia is an old friend of India. India improved its relations with USA. USA and Pak relation appears going down. Relation between China and Russia looks better than before. There appears a new equation of China-Russia-Pak in south asia. To balance and tackle this new formation, India signed a bilateral trade agreement with Russia amounting 39000 Crore across multiple sectors.  PM Modi convinced China for a combined effort to fight against terror, promoted and abetted by our neighbour.
            India got first success when SARRC meeting to be held in Pakistan was cancelled. This sent a bad signal about Pakistan. This cancellation approved the action of India which it did in self-defence in the form of surgical strike. PM Modi said terrorism casts a long shadow on our development and economic prosperity. Its reach in now global. Hence, we need to fight it together with conviction. Now, it is not a matter of India only. It is now global issue.
         What are outcomes from Goa BRICS summit? India mustered support on terror issue including the China. Albeit no mention of Pakistan and which is not required too. India-Russia reenergized  and revived their old friendship. This is need of our to bring power equation in our favor in south Asia. Talks to speed up work on setting up of BRICS institutions is a welcome move. India's NSG bid gets acknowledged in the name of clean energy.
           India got chance to start forming a new bridge with Bimstec. It is a block comprising seven countries. It includes India, Nepal, Bangladesh, Bhutan, Sri Lanka, Thailand and Myanmar. Mostly seek greater ties with China. For India, these are important for strategic and economic reasons due to their geographic locations. Goa summit helped India to strengthen its relationship with Bimstec nations.   
            The Goa summit provided India an opportunity to tackle and muster support on surgical strike issue. India used this forum strategically to prove that it is going to play a bigger role worldwide. This summit helped India in its mission to improve its presence, effectiveness and visibility on world map. India availed this opportunity to bring South Asian power equations in its favor.
Heera Lal (Views are personal and based on different sources)