The apex industry body has drafted in Infosys Technologies chief NR Narayana Murthy to chair its new committee on corporate governance, which will look at ways to propagate the CII code of good governance.

"We will request Sebi and BSE to make corporate governance a pre-requisite for corporate listing," the new CII president Rahul Bajaj told The Financial Express.

"The CII code is the only public document on corporate governance and we will ask Sebi and BSE to take a look at the code which could be suitably amended to meet their requirements. Once BSE decides to make compliance to corporate governance norms mandatory for listing, other exchanges will also follow suit," Bajaj said.

"Indian corporates are gradually realising that they cannot wish away corporategovernance, which has become the order of the day. It may, however, take another three years for local firms to actually take up good governance seriously and a decision to make it a pre-requisite for listing will hasten the process," Bajaj said.

The CII code on corporate governance was drafted by a task force, which was headed by Bajaj himself.

It is gradually being felt that corporate governance is an issue which domestic firms will eventually have to comply with, so as to enjoy the confidence of all stakeholders. "Corporate governance covers a very wide canvas and outlines the role of the corporate for every stakeholder - from investor, customer, vendor, employees, government to the society at large," feels Murthy.

Murthy also heads the Board Governance Committee recently set up by ICICI, which would advise the financial institution on ways to enhance shareholder value.

Meeting aspirations of stakeholders, Murthy said at a recent seminar, is no longer a luxury but a necessity. In the liberalisedscenario, Indian companies are faced with tough competition from transnational corporations who, because of their balance-sheet size and strong brand equity, pose a serious threat to local players. In this situation, domestic firms have little option but to invest heavily in physical infrastructure, people, brands and technology, Murthy feels.

"As a result, Indian firms are looking at options to bring in foreign capital or else it would be an uneven fight. The onus is on local players to ensure that foreign investors have confidence in them. These investors have multiple choices and they would lend funds only to companies which show a high degree of compliance. This is where corporate governance plays a vital role," Murthy explained.

Agrees Bajaj: "Investors, both overseas and domestic, will eventually invest only in firms which adhere to corporate-governance norms. It is time for the industry to aim for a high score on this front, as it serves its own interest," said the chief of CII which has around3,500 member companies.

"The CII code is crisp and has a lot of meat in it. The new committee will propagate the code and expalain to decision-makers the need the adhere to the norms," Bajaj explained.