Should our country be run like a corporate?

In the current scenario, every 5 years (most often earlier), a general election is held in which almost 50-60% of the population doesn’t vote. A bunch of 500+ MPs are selected. Most of them old, uneducated, corrupt and inexperienced. To top that, many have criminal backgrounds. Ministries are allocated based on the muscle, financial, political power (read vote bank / seat share power) to individuals who would have NIL experience and background of the responsibilities entrusted upon them.

Why not consider an alternate and hypothetical scenario?

The various ministers should be selected based on their extensive experience and educational qualifications within their required fields. For instance, the Finance Minister should be atleast a CA/CS or an MBA in Finance. He should have a min of 15 years experience in either a financial institution or in finance organization of an enterprise. Let’s say someone like D Subba Rao (RBI), Bhatt (SBU fame) Deepak Parekh (HDFC fame) and many others.

Minister of external affairs should be run by someone who has spent his career in corporate communications and political affairs. IT ministry by someone who has been a pioneer in the field like Murthy, Nilekani, Premzi etc. Same goes for other ministries like tourism , energy, education etc.
A proper background and financial check should be conducted prior to their appointment. They should sign a character certificate.

Every year, there should be 5-10 focus areas for GDP growth. It can be anything based on country’s potential, political climate, industry trends, global climate, economic scenario and most important internal capabilities. So we focus on areas like IT, Agriculture, tourism, and so on.
KRAs should be set for each area which are quantitative and measurable. They should be achievable with sufficient efforts put in.

Each department should carry a fixed budget that can’t exceed their costs. Salaries and perks should be comparable to any industry standard (which will help counter the need for corruption). The compensation for each of the Ministers and their ministries should be divided in Fixed and Variable components. The Variable component should be paid only if the quarterly or annual targets are achieved. So if the Tourism department fixed a KRA of increasing the number of tourists by 50% (and revenues by 25% yoy), then they get their variable compensation only if the increment is achieved.

Every foreign visit has to be justifiable and a complete report presented with action items immediately after the visit. At the end of the trip, a detailed expense report should be submitted and should have proper channels for authorizing any expense which is non-standard and above threshold.

At the end, awards and bonuses should be given to the Ministries who outperformed others.

There are so many similar scenarios possible if we start seeing around our own corporate environment. The above is just a teaser.

Will this lead to a more efficient and transparent government? Will this enable faster reforms and economic growth? I don’t have ready answers. But why not give it a shot (even if it has to be in phases)?

Awards - Once again are they worth it?

in Nov 2008, I had written a blog on CMMI appraisals and whether they are worth it.
Let me extend a similar thought process to something most talked about these days – Satyam’s ‘asatyam’ saga - One of the biggest corporate frauds in Indian history.

Satyam’s books were internally audited and then externally audited by an auditing agency of repute (in fact considered among the Top 4). The corporate governance of Satyam was considered second best to Infosys to the extent that it was awarded the Golden Peacock Global Award for Excellence in Corporate Governance 2008 by World Council for Corporate Governance (WCFCG). It was also awarded Golden Peacock Award winner for Excellence in Corporate Governance in 2002. The irony being these are the same two years (2002 and 2008) between which Mr. Raju has admitted committing fraud and guess what ‘for corporate governance’ only.

So I am back to my original blog on CMMI… are these audits and governance awards really worth it or have they lost the purpose for which these were created. Audits are performed to ascertain the validity and reliability of information, and also provide an assessment of a company's internal processes & control. Wikipedia says: In financial accounting, an audit is an independent assessment of the fairness by which a company's financial statements are presented by its management. Please note the highlighted words in the definition.
Golden Peacock (IOD) website states: The Golden Peacock Awards are now considered as the holy grail of corporate excellence and its guidelines provide a checklist for improvement and self-assessment in areas of quality, Innovation, training, governance, environment management and corporate social responsibility. This is the only award, which has meticulously defined and transparent selection criteria and is determined by highly elaborate and independent assessment process. Again please note the last three words: independent assessment process.

So once again, we see things been done just for the sake of it losing the spirit and the purpose for which they were defined. If a company as large as Satyam can get away from not just internal audits but from external audits and can go ahead and win one of the most prestigious awards, do such things really serve purpose or are we just trying to get some extra mileage by having them listed against our name…

Do firms from now on still carry ‘Golden Peacock’ mention in their marketing materials? Would clients be satisfied when we say that our books are externally audited by the Big 4? We are slowly loosing the marketing gimmicks and who knows might get back to what works best ‘word of action’.
By the way, Satyam had also won: Award for Best IT practices, Entrepreneur of the Year award, Golden Peacock Award for Innovation and many many more in the controversial aspects…