Time Not Ripe For Ratings For CG, Says Damodaran

Mumbai, March 24 | Updated: Mar 25 2004, 05:30am hrs
India has not reached the stage where awards for corporate governance should be bestowed, said M Damodaran, chairman and managing director, IDBI, while addressing a directors interaction on the role of developmental banks in corporate governance, organised by Tata AIG Insurance on Wednesday.

He strongly feels that awards for corporate governance should be put on hold, till corporate governance is imbibed in substance and not in just form, and is not left to the audit committees to checklist compliance issues.

Similarly, rating for corporate governance should be put off till more entities start practising it more in content, as a lot is left to be desired by way of sheer groundwork, said Mr Damodaran.

The idea of rating governance practices in companies is premature and runs the risk of being used as crutches by lenders instead of conducting a thorough appraisal of the corporate proposals for projects, Mr Damodaran further said. Speaking on the role of developmental banks he projected that banks should be lending on creditworthiness of purpose .