1. Can Business Regulation Stimulate Responsible Corporate Conduct
Can Business Regulation Stimulate Responsible Corporate Conduct ? Gathering Evidence from a Few Indian States   Regional Dialogue (SOUTHERN INDIA) Exploring the interplay between Business Regulation & Corporate Conduct in India (BRCC Project)   15th July 2011, Bangalore

2. Aspects of Business Regulation and Corporate Conduct Sameer Chaturvedi CUTS International

3. Presentation Theme Business Regulation and Business Performance
Assessing Business Performance – Global
Assessing Business Performance – Inter-State (India)
Business Regulation and Corporate Conduct
Aspects of Business Regulation
Corporate Conduct – Global and National Evolution
Aspects of Corporate Conduct
Stakeholder Interaction Framework

4. Business Regulation and Business Performance
Government acts as articulator, enabler, facilitator, regulator, gap-filler and buffer
Business deploys capital, engages labour, produce goods and generate profit that is re-invested.
Regulatory implications - business, growth, development and equity
Effective Regulation ~ Better Business Performance

5. Dimensions of Business Regulation
Time
Volume
Cost
Frequency
Jurisdiction
Interface
Consistency
Predictability

6. Assessing Business Performance

7. Highlights from Doing Business Report (WB & IFC) 2011
India’s overall Rank – 134 (out of 183)
Getting Credit– 32nd, Protecting Investors - 44th
Enforcing Contracts - 182nd, Construction Permits – 177th, Starting Business – 165th, Taxes – 164th
Registering Property: India - 5 procedures, takes 44 days; Turkey- 6 procedures, takes 6 days.
Enforcing Contracts, days in India; 406 days in China; 281 days in Russia; 230 days in Korea
Taxation Payments (No.) – In India 56 in a year, in China & France only 7 payments in a year
Closing Business - 7 yrs in India & 1.7 yrs in China
Recovery rate (closing a business) - India is 16.3%, 36.4% in China, 81.7% in Korea & 92.7% in Japan

8. Inter-state Variations in India – Highlights from Doing Business India Report (WB & IFC) 2009
Not much variation in starting business – Maximum is 41 days (Kochi) & Minimum is 30 days (Noida)
Construction Permits - takes 37 procedures in Mumbai, as against 15 in Ahmedabad, Bengaluru and Chennai
258 days for construction permits in Kolkata, as against Bengaluru, where the same work gets done in 97 days
Registering Property days in Bhubaneshwar whereas it takes 24 days in Jaipur
In Bengaluru, a firm has to bear 32.5% cost of claim in enforcing contracts, whereas in Patna it is 17%
It requires 10.8 years to close a business in Kolkata, whereas in Ahmadabad, the time spent for such formalities is 6.8 years.

9. Aspects of Business Regulation
“Conscious adoption one set of activities (that are considered legal or/and moral) as well as deliberate abandonment of another set of activities (that are considered illegal or/and immoral)”
Typologies of Regulation:
Public Regulation,
Co-regulation
Self Regulation

10. Evolution of Concept Globally
1948 – Universal Declaration on Human Rights
1997 – SA 8000 (Social Accountability International)
– Global Reporting Initiative (G3)
2000 – Millennium Declaration
2000 – United Nations Global Compact
2001 – OECD Guidelines for MNEs
2003 – UN Norms on Responsibilities of TNCs and other Businesses on Human Rights
2010 – Guidance on Social Responsibility ISO 26000
Guiding Principles on Business and Human Rights

11. Evolution of Concept Nationally
Mahatma Gandhi’s notion of large Businesses as ‘Trusts’
: Nehruvian mixed economy model, private sector with responsibility in development
Individual Code of Conducts & Responsibility
1991 Liberalization reforms, raised expectations
2007 – Guidelines on Corporate Governance for Central Public Sector Enterprises, GoI
2009 – Voluntary Guidelines on Corporate Governance and Corporate Social Responsibility
Guidelines on Corporate Social Responsibility for Central PSE, GoI
2011 – Guidelines on Social, Environmental and Economic Responsibilities of Business

12. Aspects of Corporate Conduct
Facets - corporate governance, corporate social responsibility, fair trade, labour norms, credibility charters, integrity codes, embodiment of green business practices, accountability initiatives, proactive disclosures, stakeholder engagements…
Determinants – Internal, Operational, External

13. Stakeholder Interaction Framework

14. Thank You!