21st April

Watch the Watchmen

The article urges the Indian corporate structure to seize the opportunity, opening up after Satyam saga, to clean itself up and increase the transparency and accuracy of corporate governance in the private sector which is often depicted as a model for public sector as well.

While PW is under intense pressure after the CBI charge sheets against the auditor on the grounds of negligence in the auditing, its defense is getting weaker and weaker. However, the episode provides us the opportunity to inspect system’s shortcomings and correct them as soon as possible. While the current corporate governance structure in the private sector is held as an example to the public sector, rightly said by Narayana Murthy, the current corporate management paradigm is a form of feudalism with a kind of opacity and the centralized authority creates an environment where financial objectives take priority over best practices. In this scenario, it is important for the auditing firms to become the integral part of the system. Also the system should make sure that perpetrators of any financial crime get punished without fail to restore the credibility. Even the audit firms should be kept under the scanner. ICAI made a wise move by making all companies audited only by peer review certified firms and also restricting the period of time, an auditor can be associated with a company. 

PW needs to be asked why they ignored the recommendations regarding Satyam made by other PW teams. Current situation should be taken up as an opportunity to clean up the Indian corporate structure. 

Let there be light

The article talks about the initiative California based power company has taken to source the electricity from space based solar energy. Although expensive, it is a step forward to move towards green energy sources. India should also follow the lead.

The solar panels in the satellite would beam the solar power through radiofrequency transmissions to the antennae in California which would be converted to electricity and fed to the regular power grid. Although a highly expensive exercise, the present climate change and decreasing solar energy costs indicate a paradigm shift in our energy sourcing alternatives very soon. Such innovations are necessary to decrease our dependency on fossil fuels. While Britain takes initiative to become a leader in electric car manufacturing with incentives up to £5000 for people who want to buy electric cars in order to slash down the carbon emissions by 26% by 2020, it is also investing money to provide proper infrastructure to charge these cars along with £10 million for research to the companies. 

India should also follow the lead by providing incentives to green technology car manufacturers and provide adequate infrastructure for research. It should also provide impetus to exploit its geography and commission research to produce solar power on commercial scale.