Underscoring the need for robustness in corporate governance, industrialist Adi Godrej on Wednesday said organisations need to be based on principles rather than rules.
“The need of the hour is not more rules, but effective enforcement of the existing laws. Legislation alone is not a panacea to good corporate governance,” he said, addressing a session of the CII Governance Series 2015-16 here.
Talking about the overall well-being of a company, the Godrej Group Chairman advised corporates against pursuit of endless profit.
“Promoters should desist from actions that are only in their interest and not in the interest of the company.
“Organisations need to be principle-based and not rule based because principles are harder to get around than rules,” he said.
Godrej added that corporate governance tends to be confused as protection of minority stakeholders whereas in reality, it should promote the long-term good of the company.
He enumerated how all stakeholders should be considered equal from a corporate governance point of view.