Godrej Group Chairman Adi Godrej said there is no need to bring any new legislation by the government to ensure good corporate governance, and instead an "effective enforcement" of existing laws would serve the purpose.
The Godrej group patriarch also suggested the companies, especially the family-held enterprises, to ensure a better corporate governance, which in turn would turn them more competitive in the global market.
"The need of the hour is not more rules, laws and dialogues but effective enforcement. Our government and market regulators need to enforce the existing legislation rather than creating more regulations," said Godrej.
He further said: "Legislation alone is no panacea. An unenforced legislation is worse than no legislation."Asking the corporate houses to be transparent, Godrej said that they should promote the long-term goal of the company and not necessarily the stakeholders.
"Good governance provides a competitive advantage in the global market. Well-governed companies can compete widely, easily and cheaply," he said, adding that good governance boosts employees morale and increases productivity.
Godrej also suggested that the corporate governance principles of the company need to be simple and easily and widely understood.
"This should ensure that corporate governance is a way and not a barrier to the market development. Good governance means a high level of accountability and responsiveness," he said while addressing the foundation day of the All India Management Association.
On the occasion, Hero Enterprise Chairman Sunil K Munjal said the family-owned business should become more transparent with the changing time.
"There are talks of scandals taking out every other day and many of them are family-owned businesses. I do not want to defend the indefensible but scandals are broken across the world across all types of organisations, but I think it is the responsibility of the leaders of the family-owned businesses to ensure that the value system between the organisations is well recognised," said Munjal.
According to him, this would ensure advantage to the family-held enterprises.
In today's world "where transparency has become the byword, I think it is important that secrecy which was the norms in much family-owned business should be given a go-by and these must become an open transparent organisation which contributes to the advantages which they have", he added.