In an event that happens but rarely, the Tata group received two awards on one day, Tuesday, March 27, 2001 — a testimony to the group’s record in corporate governance and leadership.
National Award for Tata Steel
The award was accepted on behalf of Tata Steel by its chairman, Ratan Tata. Accepting the award, Mr Tata said that corporate governance was a matter of "mindset and tradition". Tata Steel, he said, was practising corporate governance before the term entered the dictionary of management practitioners. This, he said, was because of the strong business ethics of JRD. Tata, who believed management’s role was that of a "trustee" of all the company’s shareholders.
Paying tribute to the role played by the board of directors of Tata Steel, he praised their sagacity in 'governing' the company, while leaving the management to the managing director and his team. Mr Tata said the board comprised independent directors who not merely spent a lot of time on the company, but also shared their expertise liberally; who spoke their mind freely and worked diligently for the benefit of the organisation.
Retired chief justice MN Venkatachaliah headed the panel of judges for this prestigious award, which included respected members of the business community such as Narayana Murthy and Keshub Mahindra.
The institution of the award was announced by finance minister Yashwant Sinha while presenting the Union budget for the year 1999-2000. Mr Sinha had then said: "… if investors have to be drawn back to the capital market, companies have to put their houses in order by following internationally accepted practices of corporate governance. This is necessary to enhance investor confidence."
This is the second year since the award was instituted. Infosys Technologies won the award in 1999. UTI is sponsoring the award for five years, while the UTI Institute of Capital Markets is providing necessary academic support by collecting nominations and assisting the panel of judges in screening the nominees.
Companies are not allowed to apply for the award. Nominations for the award come from credit rating agencies, stock exchanges, chambers of commerce, mutual funds, banks, foreign institutional investors and financial institutions.
IMC Award for Mr Ratan Tata
Previous awardees of IMC’s prestigious award, instituted in 1969, include Ramakrishna Bajaj, HT Parekh, SP Godrej and JRD Tata.
Accepting the award, Mr Tata said the challenge facing Indian industry was to become globally competitive. "Indian industry must think global in its scale of operations. They must look for international acquisitions to acquire critical mass. And they need to ask themselves why they should not be hiring globally and not confine themselves to hiring Indians only," Mr Tata said.
Lamenting the fact that there were no real Indian MNCs — though, he said, one or two Indian companies had taken the first few steps towards attaining that capability — Mr Tata said we needed to replicate our global success in information technology in other industries. "If we don’t seek to become globally competitive, we stand to be disadvantaged once the full provisions of the WTO’s agenda are on us," he said.
Mr Tata was confident that Indian industry could rise to the challenge but to do that it needed to overcome its inability to work together. "We talk a lot about forging partnerships with foreign players but we do very little of working together domestically. Unless we can truly become India Inc, we may not succeed in becoming a global entity. We need to bury our cudgels and work together — whether in industry or business or politics," Mr Tata said.
In his address, Dr Rangarajan said it was time Indian industry drew up a second "Bombay Plan" to chart out a new road map for itself. Indian industry must "delineate the path different industries must take to achieve productivity and efficiency levels comparable to the best in the world." Industry, he said, should get together with organisations like the Planning Commission to prepare these plans. The world, Dr Rangarajan noted, cannot marginalise India, but India can marginalise itself. "The presence of people like Mr Ratan Tata holds out the assurance that this will not happen and that we will be able to build an economy that is productive and efficient," Dr Rangarajan concluded.