Print Friendly, PDF & Email

[Mission 2022] SECURE SYNOPSIS: 14 September 2021

 

NOTE: Please remember that following ‘answers’ are NOT ‘model answers’. They are NOT synopsis too if we go by definition of the term. What we are providing is content that both meets demand of the question and at the same time gives you extra points in the form of background information.


General Studies – 1


 

Topic: Post-independence consolidation and reorganization within the country.

1. The internal reorganisation of India presented the next big challenge in the post independent India. Discuss how the reorganisation was done while preserving the unity of the nation. (250 words)

Difficulty level: Moderate

Reference: Chapter-1 – NCERT XII – Politics in India since Independence

Why the question:

The question is part of the static syllabus of General studies paper – 1 and mentioned as part of Mission-2022 Secure timetable.

Key Demand of the question:

To write about the process of internal reorganisation of India post-independence.

Directive word: 

Discuss – This is an all-encompassing directive – you must debate on paper by going through the details of the issues concerned by examining each one of them. You must give reasons for both for and against arguments.

Structure of the answer:

Introduction: 

Begin by giving the introduction to the state of independent regions of formerly British Indian states and Princely states and the challenges it posed.

Body:

Mention elaborate on the various challenges to drawing internal boundaries of post Independent India. The task of disregarding the administrative boundaries drawn by the British as opposed to linguistic reorganisation coupled with the push factors of many languages based regional groups should be discussed.

Highlighting the role of Potti Sriramulu and the consequent formation of States Reorganisation Commission. Mention the steps taken in the aftermath.

Conclusion:

Conclude by mentioning that steps taken for the internal reorganisation of India were successful in forging national unity.

Introduction

The boundaries of provinces in pre-1947 India had been drawn in a haphazard manner as the British conquest of India had proceeded for nearly a hundred years. No heed was paid to linguistic or cultural cohesion so that most of the provinces were multilingual and multicultural. The interspersed princely states had added a further element of heterogeneity.

Body

Background

  • Post-Independence, the reorganization of more than 500 princely states into effective provincial units was one of the biggest tasks.
  • In pursuance of the same, K. Dhar commission (1948) and JVP Committee (1948) advocated for reorganization of states based on geographical contiguity, administrative convenience, financial self-reliance and potential for development.
  • However, with the sudden death of Potti Srirammalu following hunger strike in demand for Andhra state created a volatile situation and Fazl Ali Commission was set up (in 1953) and its recommendation for reorganization of state based on linguistic criteria was accepted.

Reorganization of India while preserving unity

  • Official Language: The constitution-makers were aware that as the leaders of a multilingual country they could not ignore, or even give the impression of ignoring, the interests of any one linguistic area.
    • The constitution provided that Hindi in Devanagari script with international numerals would be India’s official language.
    • English was to continue for use in all official purposes till 1965.
  • Linguistic reorganization of states: On the basis of the State Reorganisation Commission’s (SRC) recommendations, the linguistic reorganisation of 14 States and six Centrally-administered territories were partially completed in 1956, with several other States to be reorganised later on.
    • This was a massive state rationalisation exercise, not simply to establish newer modes of power and authority but to rearrange social, cultural, regional and linguistic diversities into more manageable enclaves of state power.
  • Masses empowered: The formation of these states changed the nature of democratic politics and leadership. The path to politics and power was now open to people speaking regional languages rather than the small English-speaking elite.
  • Tribal consolidation: Language coupled with the regional and tribal identity provided the most powerful instrument for the formation of ethnonational identity in India.
    • Special rights to tribal areas led to preservation of tribal identity.
  • Reorganization led to the local people participating in the administration in a larger number because of being able to communicate in a common language.

Conclusion

The political leadership of newly independent India had the foresight to visualize the consequences of not acquiescing to popular aspirations. States’ reorganization did not, of course, resolve all the problems relating to linguistic conflicts. Disputes over boundaries between different states, linguistic minorities and economic issues such as sharing of waters, and power and surplus food still persist. However, their decision to linguistically reorganize the states has removed one important factor that would’ve jeopardized India’s integrity and thus strengthened the cause of Indian unity.

 

Topic: Post-independence consolidation and reorganization within the country.

2. Nehru favoured the policy of integrating the tribal people in Indian society by making them an integral part of the Indian nation, even while maintaining their distinct identity and culture. Elucidate. (250 words)

Difficulty level: Moderate

Reference: Chapter – 9 – India Since Independence by Bipan Chandra

Why the question:

The question is part of the static syllabus of General studies paper – 1 and mentioned as part of Mission-2022 Secure timetable.

Key Demand of the question:

To write about the Nehruvian approach to integration of tribals in India.

Directive word: 

Elucidate – Give a detailed account as to how and why it occurred, or what is the context. You must be defining key terms wherever appropriate and substantiate with relevant associated facts.

Structure of the answer:

Introduction: 

Begin by giving historical context of Tribals under British India.

Body:

Firstly, mention the dilemma posed by the Tribal issues for the newly independent India.

Next, write about the initial approach towards social development of the tribal people in multifarious ways.

Next, mention about the formulation of a government’s policy towards tribals and five point ‘tribal panchsheel’. Mention the steps taken by the government in this regard.

Conclusion:

Summarise that policy was guided by Gandhian ideals while allowing tribals to develop at their own pace without coercion.

Introduction

The preservation of the tribal people’s rich social and cultural heritage lay at the heart of the government’s policy of tribal integration. As Jawaharlal Nehru, the main influence in shaping the government’s attitude towards the tribals, put it: ‘The first problem we have to face there [in the tribal areas] is to inspire them [the tribal people] with confidence and to make them feel at one with India, and to realise that they are part of India and have an honoured place in it.’ At the same time, ‘India to them should signify not only a protecting force but a liberating one’. Indian nationalism, Nehru thought, was capable of accommodating the uniqueness of the tribal people.

Body

Nehruvian idea of integrating tribal people in Indian society

  • There were two major approaches regarding the place to be accorded to tribals in Indian society. One approach was to leave the tribal people alone, uncontaminated by modern influences operating outside their world and to let them stay more or less as they were.
  • The second approach was that of assimilating them completely and as quickly as possible into the Indian society all around them. The disappearance of the tribal way of life was not to be regretted; it was to be welcomed for that would represent their ‘upliftment’.
  • Jawaharlal Nehru rejected both these approaches. The first approach, of treating the tribal people ‘as museum specimens to be observed and written about’, was, he said, ‘to insult them’.
  • The tribal people, he wrote, ‘could not be left cut off from the world as they were’.
  • Isolation was in any case impossible at this stage, for the process of penetration by the outside world had already gone too far and ‘it was not possible or desirable to isolate them’
  • The second approach of allowing them ‘to be engulfed by the masses of Indian humanity ’,or of their assimilation through the operation of normal outside forces was also wrong, according to Nehru.
  • This would lead to the loss of the tribals’ social and cultural identity and of the many virtues they possessed.
  • Instead of these two approaches, Nehru favoured the policy of integrating the tribal people in Indian society , of making them an integral part of the Indian nation, even while maintaining their distinct identity and culture.

Nehruvian tribal Panchsheel policy

There were two basic parameters of the Nehruvian approach: ‘the tribal areas have to progress’ and ‘they have to progress in their own way’. Progress did not mean ‘an attempt merely to duplicate what we have got in other parts of India’. Whatever was good in the rest of India would ‘be adopted by them gradually’.

Jawaharlal Nehru formulated the following five principles for the policy to be pursued vis-a-vis the tribals also known as Tribal Panchsheel:

  • People should develop along the lines of their own genius, and the imposition of alien values should be avoided.
  • Tribal rights in land and forest should be respected.
  • Teams of tribals should be trained in the work of administration and development.
  • Tribal areas should not be over-administered or overwhelmed with a multiplicity of schemes.
  • Results should be judged not by statistics or the amount of money spent, but by the human character that is evolved.

Conclusion

Nehru’s approach was in turn based on the nationalist policy towards tribals since the 1920s when Gandhiji set up ashrams in the tribal areas and promoted constructive work. After independence this policy was supported by Rajendra Prasad, the first President of India, and other major political leaders.

Value addition

Measures taken to preserve tribal identity and culture

  • To give shape to the government’s policy, a beginning was made in the constitution itself which directed under Article 46 that the state should promote with special care the educational and economic interests of the tribal people and should protect them from social injustice and all forms of exploitation, through special legislation.
  • The governors of the states in which tribal areas were situated were given special responsibility to protect tribal interests, including the power to modify central and state laws in their application to tribal areas, and to frame regulations for the protection of tribals’ right to land and also their protection from money lenders.
  • The application of the Fundamental Rights was amended for this purpose. The constitution also extended full political rights to the tribal people.
  • In addition, it provided for reservation of seats in the legislatures and positions in the administrative services for the Scheduled Tribes as in the case of the Scheduled Castes.
  • The constitution also provided for the setting up of Tribal Advisory Councils in all states containing tribal areas to advise on matters concerning the welfare of tribals.
  • A Commissioner for Scheduled Castes and Scheduled Tribes was appointed by the President to investigate whether the safeguards provided for them were being observed.

 

 


General Studies – 2


 

Topic: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests

3. Climate Action and Finance Mobilization Dialogue (CAFMD) aims to advance inclusive and resilient economic development but there is much more potential in Indo-U.S bilateral relations for both to emerge as global leaders in the climate action and clean energy sectors. Analyse. (250 words)

Difficulty level: Tough

Reference: The Hindu

Why the question:

India and the United States of America (USA) launched the “Climate Action and Finance Mobilization Dialogue (CAFMD).

Key Demand of the question:

To write about CAFMD and the fruther potential of Indo-U.S bilateral relationship with respect to

Directive word: 

Analyse – When asked to analyse, you must examine methodically the structure or nature of the topic by separating it into component parts and present them in a summary.

Structure of the answer:

Introduction: 

Begin by writing about Climate Action and Finance Mobilization Dialogue (CAFMD) and its objectives.

Body:

First write about the potential of CAFMD in developing resilient and inclusive economic development.

Next, bring out the recent Indo-U. S collaborations on clean energy projects Mention about the US- India target towards raising global climate ambition and speed India’s clean energy transition and U.S aid in India’s renewable energy targets etc

Next, write about the potential it has make them global leaders in clean energy sector. The opportunities presented by COP26, Climate Ambition, Climate Finance, Global Climate Initiatives, including International Solar Alliance (ISA), Agriculture Innovation Mission for Climate (AIM4C) etc

Conclusion:

Conclude with a way forward to truly realise the potential of this partnership.

Introduction

India and the United States of America (USA) launched the “Climate Action and Finance Mobilization Dialogue (CAFMD)”. The CAFMD is one of the two tracks of the India-U.S. Climate and Clean Energy Agenda 2030 partnership launched at the Leaders’ Summit on Climate in April 2021, by Prime Minister Narendra Modi and US President Joseph Biden.

Body

Objectives of CAFMD

CAFMD would have three pillars

  • Climate Action Pillar: This would have joint proposals looking at ways in emissions could be reduced in the next decade.
  • Setting out a Roadmap: To achieving the 450GW in transportation, buildings and industry.
  • Finance Pillar: This would involve collaborating on attracting finance to deploy 450 GW of renewable energy and demonstrate at scale clean energy technologies.

Potential of Indo-US relations to emerge as global leaders in climate action and clean energy sectors

  • Expanding clean energy programs, such as the prior Partnership to Advance Clean Energy, focused on energy efficiency and solar and wind energy, and potentially adding electric vehicles, battery storage and renewable grid-integration that align with India’s priorities.
  • Developing new areas for cooperation, such as climate resilience, climate-resilient infrastructure, sustainable finance, air quality, electric mobility, among others.
  • Strengthening global partnerships, including greater ambition under the Paris Agreement, ratification of Montreal Protocol’s Kigali Amendment to phase down dangerous hydrofluorocarbons (HFCs), advancement of the International Solar Alliance (ISA), expanded USAID cooperation on energy, accelerating Mission Innovation, among others.
  • Ramping up climate finance, investments and trade with India and emerging markets to support clean energy through the International Development Finance Corporation (IDFC), S. Export-Import bank and other international platforms, such as the Green Climate Fund.
  • Fostering subnational climate action at the state- and city-levels with meaningful funding to create opportunities for cross-country learning, capacity building and implementation on the ground.

Conclusion

Through this collaboration, the United States and India aim to demonstrate how the world can align swift climate action with inclusive and resilient economic development, taking into account national circumstances and sustainable development priorities.

Value addition:

Background

  • The dialogue will strengthen India-US bilateral cooperation on climate and environment.
  • It will also help to demonstrate how the world can align swift climate action with inclusive and resilient economic development, taking into account national circumstances and sustainable development priorities.
  • The US will collaborate with India to work towards installing 450 GW of renewable energy by 2030.
  • Currently, India’s installed power capacity is projected to be 476 GW by 2021-22 and is expected to rise to at least 817 GW by 2030.

Recent India-US collaborations in Climate Action

  • The United States and India are launching the “U.S.-India Climate and Clean Energy Agenda 2030 Partnership.”
  • Led by President Biden and Prime Minister Modi, the Partnership will represent one of the core venues for U.S.-India collaboration and focus on driving urgent progress in this critical decade for climate action.
  • Both the United States and India have set ambitious 2030 targets for climate action and clean energy.
  • In its new nationally determined contribution, the United States has set an economy-wide target of reducing its net greenhouse gas emissions by 50–52 percent below 2005 levels in 2030.

 

 


General Studies – 3


 

Topic: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment

4. RBI’s Account Aggregator framework is an encouraging stimulus for easing of credit flow in the economy, especially for the MSME sector. Comment. (250 words)

Difficulty level: Moderate

Reference: Financial Express

Why the question:

The Reserve Bank of India launched the account aggregator framework aimed at making financial data more easily accessible.

Key Demand of the question:

To write about the role Account aggregators can play in improving credit flow in the economy as well as credit flow to the MSME sectors.

Directive word: 

Structure of the answer:

Introduction: 

Begin by explaining what is an account aggregator.

Body:

First, write about the issue of customer data being fragmented in databases of banks, lenders, insurance companies, government bodies, and RBI’s account aggregator being a solution for seamless and secure data sharing digitally.

Also mention the benefits to MSME such as quick link of data, no need for a physical collateral, lack of organised records of financial statements pushes MSMEs to secure credit through informal channels etc and this promotes a fast access to small formal credit. 

Conclusion:

Conclude by mentioning that and RBI’s Account Aggregator framework is a step in the right direction and further steps that are needed to make it secure and effective.

Introduction

The Account Aggregator (AA) framework, which was first announced by the Reserve Bank of India (RBI) back in 2016, will now be open for users to access account aggregation services. According to the RBI, AAs are a new class of non-banking financial companies (NBFCs) that offers account aggregation services — retrieving or collecting information of its customer pertaining to their financial assets and consolidating, organizing, presenting it to the customer or any other person as per the instructions of the customer — in exchange for a fee. This has the potential to streamline credit access for MSMEs.

Body

Account Aggregator’s framework

  • The AA network has been launched on the basic premise that customer data is generally fragmented and exists in silos in databases of banks, lenders, insurance companies, government bodies, and other entities.
  • In order to provide an institutional framework for seamless and secure data sharing digitally between let’s say a borrower and a bank for credit access, the AA network was created instead of dedicating time in collating information such as scanned copies of bank statements, stamped documents from notaries, bank statements, GST returns, cash flow, etc., and then sharing it with the lender.
  • Here, financial assets could be bank deposits including fixed deposits, saving deposits, recurring deposits, current deposits, deposits with NBFCs, SIPs, government securities, equity shares, bonds, debentures, ETFs, insurance policies, balances under the National Pension System (NPS), etc.
  • With AA services, the user is not required to physically share hard copies of documents from various entities or confidential login details of his/her documents or browse through different sites for information required by financial service providers.

Potential to streamline credit access for MSMEs.

  • Formal credit: Instead of physical collateral usually required for an MSME loan, this information collateral-based credit underwriting can help the business access a small formal credit.
    • With AA now making it possible to share other credit-worthiness proxies like digital invoices, tax returns, etc., it will help businesses towards cash-flow-based lending from current physical-collateral-based lending thereby getting more people and businesses in the formal credit system.
  • Access to credit due to information: The fast-tracking of data sharing to broaden the scope of financial services for better products and services can help micro, small, and medium enterprises (MSMEs) access credit in a more convenient and trustworthy manner that eventually might help address the credit crunch faced by MSMEs currently.
  • Securing easy credit: Lack of organised records of financial statements pushes MSMEs to secure credit through informal channels. Importantly, out of 6.33 crore MSMEs in India, only 10 per cent have access to formal credit, according to a November 2019 report by PwC and FICCI titled Wider Circle. AA framework can remedy this ill.
  • Faster loans: AA system has the potential to revolutionise lending to MSMEs by allowing much faster access of financial data of businesses to lenders and reducing the loan application cycle to a few minutes.
  • Tailored services by banks: Account Aggregators are an exciting addition to India’s digital infrastructure as it will allow banks to access consented data flows and verified data. This will help banks reduce transaction costs, which will enable them to offer lower ticket size loans and more tailored products and services to our customers.
  • It will also help us reduce frauds and comply with upcoming privacy laws.
  • More options to msme’s: The larger benefit can also come in the form of access to alternate data to the banks using the framework.

Conclusion

This would enable banks to potentially not only offer lower ticket size loans, but also possibly reach out to a broader set of customers for loans which in the past they might have rejected. Thus, RBI’s Account Aggregator framework is a step in the right direction and further steps that are needed to make it secure and effective.

Value addition

  • The Ministry of Finance had last week in a statement informed that eight banks have been onboarded onto the AA network.
  • This included Axis Bank, ICICI Bank, HDFC Bank, and IndusInd Bank that are already sharing data based on user consent while State Bank of India, Kotak Mahindra Bank, IDFC First Bank, and Federal Bank will shortly begin the same.
  • The data shared by AAs with banks or other financial institutions with the user’s consent is encrypted and can be decrypted only by the recipient.
  • Moreover, the time period for which the institution would have access to the data will be visible to the user at the time of giving consent for sharing the data.

 

Topic: Challenges to internal security through communication networks, role of media and social networking sites in internal security challenges, basics of cyber security

5. Artificial Intelligence (AI) in cybersecurity can provide robust protection and generate rapid responses to cyberthreats. Discuss the advantages of integrating A.I in cybersecurity. (250 words)

Difficulty level: Moderate

Reference: Live Mint

Why the question:

Artificial intelligence (AI) is being looked upon as the next frontier to make cyber-defence robust and scalable.

Key Demand of the question:

To write about the potential advantages of AI in tackling cybersecurity.

Directive word: 

Discuss – This is an all-encompassing directive – you must debate on paper by going through the details of the issues concerned by examining each one of them. You must give reasons for both for and against arguments.

Structure of the answer:

Introduction: 

Begin by writing about the AI in the context of cyber security.

Body:

First, giving context of rising cyber security threats. Cite stats and examples.

Next, write about the potential of AI in this regard to tackle the threats – early recognition of threats, Categorize Threats, Quick response, Robust monitoring and protect sensitive data etc.

Conclusion:

Conclude by mentioning way forward that needs to approach to make AI in cybersecurity scalable.

Introduction

Artificial Intelligence (AI) is the branch of computer science concerned with developing machines that can complete tasks that typically require human intelligence. The cyberattack surface in modern enterprise environments is massive, and it’s continuing to grow rapidly. AI systems have immense potential in cybersecurity. It can be trained to generate alerts for threats, identify new types of malware and protect sensitive data for organisations.

Body

Advantages of integrating Artificial Intelligence in cybersecurity

  • Continuous learning
    • AI uses machine learning and deep learning to learn a business network’s behaviour over time.
    • By recognizing patterns on the network and clustering them, AI proceeds to detect any deviations or security incidents from the norm before responding to them.
    • Potential threats with similar traits to those recorded get blocked early enough.
    • The fact that AI keeps learning makes it difficult for hackers to beat its intelligence.
  • Identifies Unknown Threats
    • Unknown threats can cause massive damage to a network. Worse still is the impact they can have before you detect, identify, and prevent them.
    • As attackers try new tactics from sophisticated social engineering to malware attacks, it is necessary to use modern solutions to prevent them.
    • AI has proven to be one of the best technologies in mapping and stopping unknown threats from ravaging a company.
  • Handle a Lot of Data
    • AI’s automated nature allows it to skim through massive chunks of data and traffic.
    • Technology that uses AI, such as a residential proxy, can help you to transfer data.
    • It can also detect and identify any threats hidden in the sea of chaotic traffic.

 Better Vulnerability Management

    • AI helps you assess systems quicker than cybersecurity personnel, thereby increasing your problem solving ability manifold.
    • It identifies weak points in computer systems and business networks and helps businesses focus on important security tasks.
    • That makes it possible to manage vulnerability and secure business systems in time.
  • Reduces Duplicative Processes
    • AI, while mimicking the best of human qualities and leaving out the shortcomings, takes care of duplicative cybersecurity processes that could bore your cybersecurity personnel.
    • It helps check for basic security threats and prevent them on a regular basis.
    • It also analyzes your network in depth to see if there are security holes that could be damaging to your network.
  • Accelerates Detection and Response Times
    • The best way to detect and respond to threats in time is by integrating AI with cybersecurity.
    • AI scans your entire system and checks for any possible threats.
  • Securing Authentication
    • AI secures authentication anytime a user wants to log into their account.
    • AI uses various tools such as facial recognition, CAPTCHA, and fingerprint scanners amongst others for identification.
    • The information collected by these features can help to detect if a log-in attempt is genuine or not.

Conclusion

The increasing rate of cyber-attacks has posed a great challenge in the recent times. AI gives the much-needed analysis and threat identification that can be used by security professionals to minimize breach risk and enhance security posture. AI can help discover and prioritize risks, direct incident response, and identify malware attacks before they come into the picture. So, even with the potential downsides, AI will serve to drive cybersecurity forward and help organizations create a more robust security posture.

 

 


General Studies – 4


 

Topic: Emotional intelligence-concepts, and their utilities and application in administration and governance.

6. How does emotional intelligence influence in improving an organisation’s productivity? (150 words)

Difficulty level: Easy

Reference: A Practical approach to Ethics Integrity & Aptitude by DK Balaji

Why the question:

The question is part of the static syllabus of General studies paper – 4 and part of ‘Conceptual Tuesdays’ in Mission-2022 Secure.

Key Demand of the question:

To write about how EI influences productivity in an organisation.

Structure of the answer:

Introduction: 

Start by defining emotional intelligence (EI)

Body:

Write about how EI plays a part in enhancing the productivity of an organisation – improves communication, promotes problem solving and innovation, mitigates conflicts and strengthens collaboration and teamwork etc.

Conclusion:

Conclude by writing about other benefits of EI.

Introduction

Emotional intelligence (EI) is the ability to identify, use, understand, and manage one’s emotions as well as emotions of others in positive ways to relieve stress, communicate effectively, empathize with others, overcome challenges and defuse conflict.

Body

Role of Emotional Intelligence in improving an organisation’s productivity

  • The workplace represents a distinct social community, separate from our personal lives, in which there is a growing appreciation that higher EI allows a person to understand themselves and others better, communicate more effectively, and cope with challenging situations.
  • Employees with high EQs are more likely to listen, reflect, and respond to constructive criticism.
  • Emotionally intelligent leaders tend to have greater empathy. For example, if you notice a co-worker displaying some nonverbal signs of sadness, you might take them aside to offer empathy.
  • When you are empathetic and understanding of others’ emotions, you can make decisions with ease and complete tasks more efficiently.
  • If we consider communication in the workplace, and more specifically, conflict resolution in the workplace, individuals with higher emotional intelligence are more likely to approach conflict resolution in a collaborative manner, working together with others in order to effectively reach a mutually acceptable outcome.
  • Emotionally intelligent employees are more likely to keep their cool under pressure. For example, if you know you had a rough night, you might attempt to change your behaviours the following workday by shifting your focus toward more positive feelings.
  • Relationships in the workplace are affected by how we manage our own emotions and our understanding of the emotions of those around us.
  • Studies have linked higher emotional intelligence with better job satisfaction as well as overall job performance.
  • Success requires a team and leaders, by definition, require followers. Leaders can empower others in a variety of ways. They enable others by fostering collaboration and building trust. Successful leaders share power, delegate well, and do what’s necessary to help others perform.
  • Good networking skills are a staple of job effectiveness for the average worker. Networking has too often been associated with “using” other people, but a heightened EQ ensures a mutually beneficial approach to others.

Conclusion

Practicing emotional intelligence can help improve company culture, and your own well-being both in and out of the workplace. An   organization   that   is emotionally  intelligent  has  employees  who  are  productive, motivated  and  efficient.  They  are committed  to  achieving their goals. Team members  are  able  to  work  together  in  the  most  effective manner,  and  provide  better  results  for  the  organization  as  a whole.

 

Topic: Corporate governance;

7. The purpose of corporate governance is to help build an environment of trust, transparency and accountability, necessary to achieve economic and social goals of the organisation. Elaborate. (150 words)

Difficulty level: Moderate

Reference: Ethics by Lexicon publications.

Why the question:

The question is part of the static syllabus of General studies paper – 4.

Key Demand of the question:

To address the concept of corporate governance and its socio-economic significance between individual and community goals.

Directive:

Elaborate – Give a detailed account as to how and why it occurred, or what is the particular context. You must be defining key terms where ever appropriate, and substantiate with relevant associated facts.

Structure of the answer:

Introduction:

Start by defining corporate governance.

Body:

In the first part briefly explain, that corporate governance is about enabling organisations to achieve their goals, control risks and assuring compliance.

Then discuss in detail role of corporate governance how it will lead to fulfilment of economic and social goals of the organisation as well as between individual and community-based goals. Give examples from India and the world to substantiate your point.

Conclusion:

Conclude with its importance of corporate governance in improving growth and productivity companies as well as achieving socio-economic objectives.

Introduction

Corporate governance is the system of rules, practices, and processes by which a firm is directed and controlled. Corporate governance essentially involves balancing the interests of a company’s many stakeholders, such as shareholders, senior management executives, customers, suppliers, financiers, the government, and the community. Ethics is at the core of corporate governance, and management must reflect accountability for their actions on the global community scale.

Body:

According to the OECD, the purpose of corporate governance is to help build an environment of trust, transparency and accountability necessary for fostering long-term investment, financial stability and business integrity, thereby supporting stronger growth and more inclusive societies.

Importance of Corporate Governance:

  • Ensures that the management of a company considers the best interests of all stakeholders involved;
  • Helps companies deliver long-term corporate success and economic growth;
  • Maintains the confidence of investors and as consequence companies raise capital efficiently and effectively;
  • Has a positive impact on the price of shares as it improves the trust in the market;
  • Improves control over management and information systems (such as security or risk management)
  • Good corporate governance also aims at a faster decision-making process by establishing a clear delineation of roles between owners and management.
  • Gives guidance to the owners and managers about what are the goals strategy of the company;
  • Minimizes wastages, corruption, risks, and mismanagement;
  • Helps to create a strong brand reputation;
  • Most importantly, it makes companies more resilient.
  • An increase in staff retention and motivation can be expected, especially from senior staff, when the company has a well-defined and communicated vision and direction.
  • A focus on the company’s core business will also make it easier to penetrate the market and attract the interest of shareholders.
  • Improved reporting on performance in turn leads managers and owners to make more informed and fact-based decisions, leading ultimately to improving sales margins and reducing costs.

Conclusion:

The effectiveness of the Corporate Governance has become a global concern. Mainly after many corporate collapse (e.g. Enron, Boeing etc.), fraud cases (e.g. Lehman Brothers), shareholder suits or questionable strategic decisions are drawing attention to the top level decision-making body of the corporation and the board of directors, necessitating the need for ethical considerations where in Indian context, Uday Kotak committee recommendations can form guidelines for better ethical corporate governance.

Value addition:

Measures to improve Corporate Governance:

  • Ensure a balanced, competent and diverse Board: Business should strive for directors who are qualified, understand the business and can offer a fresh perspective. Studies show Boards with greater gender diversity result in improved financial performance.
  • Review your Board composition on a regular basis to identify any shortcomings and make timely improvements.
  • Build solid foundations for oversight: Establish, monitor and evaluate the roles and responsibilities of the Board and management. The Board needs to have visibility of management actions and key decision making.
  • Gear key performance indicators towards long term value creation not just in the short term.
  • Prioritize risk management: Establish an effective risk management and internal control framework and periodically review its effectiveness. Developing a disaster recovery plan is essential.
  • Ensure integrity in corporate reporting including safeguards such as conducting external audits of the business.
  • Provide timely and balanced information: Providing transparency to key stakeholders both in the good and bad times promotes stakeholders’ confidence in the business.
  • Emphasise integrity, promote ethical behaviours and consult different categories of stakeholders on their interests.
  • Treat shareholders equitably and respect their rights.
  • Ensure adequate disclosures around related parties’ transactions and director’s other interests. This is especially important where a director may have external financial interests that could influence his decision.

  • Join our Official Telegram Channel HERE for Motivation and Fast Updates
  • Subscribe to our YouTube Channel HERE to watch Motivational and New analysis videos