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In a world increasingly defined by relentless productivity, constant work resulting in stress, and ever-growing competition, the importance of taking time to pause, reflect, and rejuvenate has never been more important. Professionals of today have to be alert all the time, keep themselves updated with latest rules and regulations, fulfil the growing demands of clients and yet, take out time for themselves. It is important to stay healthy, and fresh. Niksen, Mindfulness, and Meditation are three distinct practices that encourage us to slow down; each one approaches relaxation and mental clarity from a unique perspective. As stress-related conditions rise globally, more people are turning to these methods to achieve balance and peace. This article is dedicated to the well-being, good health and self-awareness of today’s professionals. Niksen: The Art of Doing Nothing Niksen, a Dutch concept, literally translates to ‘doing nothing’. Unlike other practices that focus on specific tasks like meditation or self-awareness, Niksen invites individuals to engage in activities with no purpose or goal in mind. Whether staring out of a window, daydreaming, or simply sitting idle, Niksen is about letting the mind wander freely without the pressure to produce or be present in any particular way. At first glance, Niksen may seem counterproductive, especially in today’s culture of hyperactivity and ‘workaholism’. Its value lies in giving the brain a chance to rest, process and reset. Niksen taps into our natural need for moments of idleness, providing the mental space to recover, spark creativity, and reduce anxiety. The beauty of Niksen is in its simplicity. There are no techniques or rituals to learn, no mindfulness to cultivate. It is the permission to exist without expectation, to allow the mind to wander aimlessly—an essential practice for those who find structured approaches like meditation overwhelming. Examples of Niksen Staring out the window : Sitting by a window, watching the clouds, birds, or people passing by without any specific goal or focus. Daydreaming : Allowing one’s mind to wander freely without trying to solve a problem or plan anything, simply enjoying the mental drift. Lying on the couch : Relaxing on the sofa, perhaps listening to background noise like soft music, without engaging in any tasks or distractions. Sitting in a park : Spending time in a park or garden, observing the surroundings without feeling the need to engage in conversation or activities. Flipping through a magazine : Casually looking at pictures in a magazine without reading in-depth articles or trying to absorb information.   Mindfulness: The Power of Present Awareness Mindfulness, though often used interchangeably with meditation, is distinct in its emphasis on conscious awareness. Rooted in the Buddhist tradition, it involves actively paying attention to the present moment with a non-judgmental attitude. Whether we are eating, walking, or even washing dishes, mindfulness is about being fully engaged in the activity at hand. It requires us to notice our thoughts, feelings, and surroundings without reacting or getting lost in them. Unlike Niksen, where the mind can drift freely, mindfulness encourages deliberate focus on the ‘now’. In mindfulness, even daydreaming or distraction is observed, not indulged. This practice has been extensively researched for its ability to reduce stress, improve emotional regulation, and enhance overall well-being. Studies show that mindfulness can even alter the brain, thickening areas associated with attention and emotional processing. Mindfulness is particularly helpful in addressing the modern-day tendency to multitask. Instead of rushing through life on an autopilot mode, it offers a way to experience each moment more fully, cultivating a deeper sense of connection with ourselves and our environment. Examples of Mindfulness Mindful eating : Paying full attention to the taste, texture, and smell of one’s food, noticing each bite without distractions like TV or phone. Walking mindfully : Focusing on the sensation of one’s feet touching the ground, the rhythm of one’s steps, and one’s breathing as one walks. Mindful breathing : Taking slow, deep breaths while noticing the sensation of air entering and leaving one’s body, staying present with each breath. Mindful listening : Engaging fully in a conversation, giving one’s complete attention to the speaker, and observing one’s thoughts or reactions without judgment. Body scan : Bringing awareness to different parts of one’s body, noticing tension or relaxation as one mentally scans from head to toe.   Meditation: A Practice of Deep Reflection Meditation is a more structured mental exercise aimed at achieving a heightened state of consciousness. There are many forms of meditation—such as focused attention, loving-kindness, transcendental, and mantra-based meditation—but all involve setting aside dedicated time to cultivate inner calm, insight, or compassion. Unlike mindfulness, which can be practiced anytime during daily activities, meditation usually requires a quiet space and a set period. Meditation is an ancient practice rooted in spiritual traditions like Hinduism and Buddhism, but it has been widely embraced in secular contexts as well. Its goal is often to quiet the mind, attain clarity, and foster emotional balance. Over time, consistent meditation practice can rewire the brain, reducing stress responses, increasing empathy, and enhancing self-awareness. It is a process of returning the mind to a point of stillness, often focusing on the breath, a mantra, or an image to centre one's attention. While mindfulness encourages ongoing awareness in everyday activities, meditation is more of a retreat from activity—a break to reset the mind, allowing practitioners to reflect deeply on their thoughts and emotions. It is often seen as a path toward spiritual growth or psychological healing. Examples of Meditation Breath-focused meditation : Sitting quietly and focusing on one’s breath, using it as an anchor to bring one’s attention back when one’s mind wanders. Loving-kindness meditation : Silently repeating phrases like "May all be happy" while focusing on feelings of compassion for oneself and others. Mantra meditation : Repeating a word or sound (like "Om") to focus the mind and reach a deeper state of concentration and calm. Guided visualization : Closing one’s eyes and listening to a guided audio or video, imagining peaceful scenes or positive outcomes to relax the mind. Transcendental meditation : Practicing twice a day by sitting with closed eyes for 15–20 minutes, repeating a personalized mantra to transcend thought and achieve inner stillness.   Niksen vs. Mindfulness vs. Meditation: Key Differences and Benefits While these three practices share a common thread of slowing down and enhancing mental well-being, they diverge in method and intent. Niksen is the most unstructured of the three. It allows for the freedom to do nothing and to not focus on anything, not even on self-awareness or achieving any state of mind. It's especially suited for those who feel overwhelmed by the constant pressure to be productive and need to ‘unplug’ mentally. The primary benefit of Niksen is relaxation and mental recovery, offering a space for creativity to flourish without any forced engagement. Mindfulness is about intentional awareness. It requires active engagement with the present moment and is ideal for those looking to cultivate greater presence in their daily lives. Mindfulness doesn't demand a pause in activity; instead, it requires us to become fully present during whatever we are doing. Its benefits include stress reduction, improved focus, and emotional regulation. Meditation is a structured or formal practice. It involves deliberate techniques to quiet the mind, increase concentration, and foster inner peace. Meditation suits those seeking deeper mental clarity or spiritual insight, often requiring discipline and regular practice to realize its long-term benefits. It is particularly effective for long-term stress management, emotional healing, and enhancing overall well-being.   Which practice to choose? Choosing between Niksen, mindfulness, and meditation depends largely on personal preference, lifestyle, and the needs of the moment. If one is feeling mentally exhausted  and needs a break from the pressure to perform, Niksen may be the best option. For someone who is looking to increase presence  in daily life and manage stress or anxiety, mindfulness is effective in developing a habit of staying grounded in the present moment. To those who seek deeper emotional or spiritual growth , meditation might be the answer. Its more structured nature makes it a powerful tool for achieving inner calm and insight.   A Harmonious Approach: Blending Practices It is worth noting that these practices don’t need to be mutually exclusive. In fact, they complement each other beautifully. Niksen can serve as a gentle entry point for those new to mindfulness or meditation, offering rest and relief before diving into more active mental practices. Similarly, practicing mindfulness can prepare the mind for deeper meditation by fostering awareness and focus. In a world that often demands too much, finding time for any of these practices can be transformative. Whether through the relaxed idleness of Niksen, the focused awareness of mindfulness, or the deep reflection of meditation, we have multiple paths toward self-awareness, greater peace and clarity.

In recent years, the concept of employee directors, or, in other words, workers serving on the board of directors, has gained popularity in many countries of the west. Employee representation at the board level is not only a radical shift from the traditional shareholder-centric model but also a move towards a more inclusive, democratic, and transparent approach to business decision-making. But while this idea promises to strengthen the relationship between employers and employees, it also raises critical questions about its feasibility, fairness and impact on the company’s performance. In this article, we will discuss this concept, the relevant legal provisions, the pros and cons, and the way forward.   Composition of Board of Directors   Traditionally, corporate boards were composed of directors, whose primary responsibility was to maximize shareholder value. Many companies also had nominee directors and professional directors. The concept of independent directors (IDs) was introduced as part of corporate governance reforms aimed at improving transparency, accountability and oversight in companies. The timeline for the introduction of independent directors varies across countries, but it generally gained prominence in the late 20th century. For instance, in the UK, the concept of independent directors was brought to the fore by the Cadbury Committee Report on corporate governance in 1992. In the US the concept got significant attention in the wake of major corporate scandals like Enron and WorldCom; consequently, the Sarbanes-Oxley Act of 2002 mandated public listed companies to have independent directors on their boards. Prior to this Act, having IDs in the Board was part of corporate best practice only. In India, the concept was introduced in 2000 by Clause 49 of the Listing Agreement that was implemented by the Securities and Exchange Board of India (SEBI). In the European Union also, in the wake of major corporate scandals, the need for independent directors became a key aspect of corporate governance reform in the early 2000s. Similarly, in Australia, the role of IDs became more formalized with the release of the ASX Corporate Governance Council's Principles of Good Corporate Governance and Best Practice Recommendations in 2003.   Employee directors   While the inclusion of independent directors helped drive transparency and efficiency, it has also been criticized for neglecting the interests of an important stakeholder, the employees. The idea behind employee directors was therefore introduced to bridge this gap, giving workers a voice in boardroom discussions and ensuring that their interests are directly represented at the highest levels of decision-making.   Employee directors can act as a bridge between the management and workmen and thereby help align the interests of both the parties. First, they bring an inside perspective to the board, providing valuable insights into the company's operational and cultural dynamics. Employees have a deep understanding of how company policies impact daily work life, and their involvement could lead to more thoughtful, balanced decisions that take into account long-term sustainability rather than short-term profit. Moreover, employee representation can enhance workplace morale and engagement. Having a representation on the board makes them feel empowered, and in turn, motivated, more productive and loyal. This often leads to lower turnover rates and a better organizational culture.   A proven model in many countries   Employee directors on boards is not a recent concept. In fact, many European countries have had worker participation in corporate governance for decades. However, the legal provisions governing employee directors vary significantly across countries, depending on their respective labour laws, corporate governance frameworks, and social models. In some nations, employee representation on corporate boards is mandated by law, while in others, it is voluntary or not practiced at all. Below is an overview of the legal provisions governing employee directors in a few countries:   Germany   Germany is one of the most prominent examples of mandatory employee representation on corporate boards, through a system known as Mitbestimmung (co-determination). As per the Co-Determination Act of 1976, in companies with over 2,000 employees, half of the supervisory board members must be employee representatives. This applies to all large companies, including public listed companies. For companies with 500–2,000 employees, one-third of the supervisory board is made up of employee representatives. These representatives are elected by the workforce and include both regular employees and union representatives. They have equal voting rights as the shareholder-appointed board members, although in the case of a tie, the chairman (a shareholder representative) has the casting vote.   France   In France, employee representation on corporate boards is legally required for large companies. As per the Loi Rebsamen (2015) and Pacte Law (2019), companies with over 1,000 employees in France or 5,000 globally must include at least two employee representatives on their boards of directors or supervisory boards. The precise number of employee representatives varies depending on the company’s size and internal governance structure, but generally, the threshold is two representatives for boards with more than eight members. Employee representatives are chosen either by the workers directly or via labour unions, depending on the company's internal rules. The aim of these laws is to ensure worker input in corporate governance, while also promoting social dialogue between employers and employees.   Sweden   Sweden has a well-established system of employee board representation as part of its broader tradition of labour market collaboration. Under the Board Representation (Private Sector Employees) Act of 1987, companies that have at least 25 employees, are required to have employee representatives on the board. Workers can appoint two representatives if the company has fewer than 1,000 employees, or three representatives if there are more than 1,000 employees. The employee board members have the same rights and responsibilities as other directors, though they are not involved in decisions related to collective bargaining agreements or labour disputes.   Denmark   In Denmark, employee representation on boards of directors is voluntary but becomes mandatory once employees opt for it. As per their Companies Act, companies with at least 35 employees must allow their workforce to elect representatives to the board of directors. Employees have the right to elect one-third of the board members, with a minimum of two seats. The threshold for electing these representatives is triggered when employees initiate the process through a formal vote. Employees elect representatives every four years, and these directors have the same rights and duties as other board members. Denmark’s system allows for flexibility, as employee representation is implemented only if the workforce expresses interest.   Norway   According to the Norwegian Public Limited Liability Companies Act, if a company has between 30 and 50 employees, employees can choose to have one board representative. Companies with more than 50 employees must have one-third of their board seats filled by employee-elected representatives, with a minimum of two representatives. Employee representatives are granted the same rights and responsibilities as other board members, but similar to Sweden, they are excluded from decisions concerning collective labour issues.   Finland   Finland's model provides for voluntary employee representation based on negotiations between employees and management. The Act on Personnel Representation in Company Administration, 1990 (which is now a part of the Co-operation Act of 2021) provides that in companies with over 150 employees, the latter may negotiate with the management to have their representative on the board. The number of representatives is determined through negotiations, and these representatives have the same voting rights and responsibilities as other directors.   Austria   Austria has a similar structure to Germany, with mandatory employee representation in large companies. The Austrian Labour Constitution Act (1974) provides that companies with over 300 employees must allocate one-third of supervisory board seats to employee representatives. These representatives are elected by the works council and have full voting rights, though they cannot vote on issues related to collective bargaining.   United Kingdom   The United Kingdom has no legal requirement for employee representation on boards, but there has been increasing discussion around corporate governance reform in this area. The new Corporate Governance Code of 2018 encourages large companies to engage more with their workforce. One option for doing this is to appoint an employee director, although this is not mandatory. Instead, companies can choose from several methods, such as creating a formal workforce advisory panel or designating a non-executive director to liaise with employees. Despite being voluntary, the Code reflects a growing awareness in the UK of the benefits of incorporating employee perspectives into corporate governance.   United States   In the United States, as of now, there are no legal mandates for employee representation on corporate boards. Corporate governance in the US is typically shareholder-centric, with directors primarily accountable to shareholders. However, there has been some discussion about the potential for employee ownership models, such as Employee Stock Ownership Plans (ESOPs), which give employees a stake in the company, though this does not translate into formal board representation in most cases.   Japan   In Japan, as such there is no legal mandate for employee representation on board. However, the Japanese corporate culture often involves close consultation with employees through unions and work councils. The Japanese system emphasizes consensus-building and lifetime employment, which fosters strong relationships between management and workers, though it does not involve formal board representation.   The position in India   In India, the concept of employee directors is still relatively underdeveloped compared to European countries where mandatory worker participation on boards is more common. However, Indian corporate governance is evolving, and there are some frameworks and discussions around employee representation in the board.   Legal Framework   India’s corporate governance system is traditionally shareholder-centric, with boards primarily representing the interests of shareholders rather than employees. The Companies Act, 2013 does not mandate the inclusion of employee representatives on the boards. However, there are provisions under labour laws and sector-specific regulations that offer certain forms of worker representation in corporate governance. The following paragraphs contain brief discussion on the same:   i. Public Sector Undertakings (PSUs)       In India, the PSUs have had a long-standing practice of having employee representatives in governance. In many PSUs, the government has allowed employees to be elected to the board, representing their interests alongside other directors. As per the Department of Public Enterprises (DPE) guidelines, workers’ participation in decision-making is encouraged. Employee representatives can be part of the board in a non-executive capacity, usually representing trade unions or employee welfare organizations.   ii. Trade Unions and Workers’ Participation   The Indian labour laws encourage workers' participation in management. In large organizations with active trade unions, there is often indirect influence on company policies through worker participation mechanisms like joint management councils and work committees, although these are typically consultative bodies and not formal board membership.   iii. Employee Stock Ownership Plans (ESOPs)   Though definitely not a substitute for employee directors, Employee Stock Ownership Plans (ESOPs) in India allow employees to have a stake in the company by owning shares. Some companies with active ESOPs involve employees in decision-making to a certain degree. This concept empowers employees economically, but it does not grant them formal representation on the board.   iv. Workers' Representation under the National Labour Codes   India is all set to have four new labour codes, vi., the Code on Social Security 2020, the Occupational Safety, Health and Working Conditions Code 2020, the Industrial Relations Code 2020, and the Code on Wages 2019, that will together consolidate the existing 29 central labour and industrial laws. The idea is to avoid multiplicity of laws. As part of these ongoing labour reforms, there is increasing emphasis on worker representation at various levels of governance, however, there is no provision yet for employee directors.   v. Voluntary Practices in Private Companies   In India’s private sector, there are instances where companies with a focus on worker-friendly policies are increasingly recognizing the importance of including employees in decision-making processes, but they tend to use advisory councils or employee committees, rather than appointing employees as formal board members.   Challenges of employee representation in Board   While the concept of employee directors definitely has its merits from the perspective of corporate governance, it also comes with significant challenges, especially in countries with shareholder-centric corporate law frameworks. The following are the main challenges:   (i)  Conflict of interest : It would be a challenge for employee directors to prioritize the interests of their fellow workers over the broader goals of the company.   (ii)   Level of   competence : Serving on a board of directors requires specialized knowledge of corporate finance, strategy and risk management. For meaningful contribution to board discussions employees are expected to master these skill sets, which may be difficult.   (iii)  Supremacy of Labour Unions in certain sectors : In India, labour unions are quite powerful in sectors like manufacturing, but their interest is more on collective bargaining and labour rights than on any board representation.   (iv)  Choosing the right   representative : A large, diversified company has thousands of employees in its various departments, with various skillsets, and different priorities. Choosing the right representative to properly represent the interests of all workers is a very difficult task.   (v)   Promoter-controlled companies : In country with predominance of family-owned businesses, where decision-making is concentrated in the hands of a few key stakeholders, inclusion of employees at the board level is a difficult proposition.   (vi)  Top-down approach and   resistance to change : In India, the corporate world generally follows a top-down governance model and broader stakeholder participation will be met with extreme resistance to change.   Conditions for success of Employee Directorship   For companies considering the inclusion of employee directors, several key factors must be addressed to ensure success.   First , clear structures and guidelines must be established to define the role of employee directors, their responsibilities, and their scope of influence. There must be a balance between the enhanced voice of employees and the board's ability to act in the company's best interest.   Second , there must be training and mentorship of employees to ensure that the employee representatives have the necessary skills and knowledge to contribute effectively.   Third , there must be regular communication between employee directors and the employees to ensure that the former understand the concerns of the latter and represent their views accurately, rather than compromise the same.   And fourth , the employee directors must maintain confidentiality when participating in sensitive board discussions.   Way Forward   The concept of employee directors is part of a broader movement towards more inclusive and stakeholder-oriented corporate governance. As businesses face increasing pressure to address issues like inequality, environmental sustainability and social responsibility, the inclusion of employee voices in boardrooms could be a powerful tool for driving positive change. By involving employees in decision-making processes, companies can foster a culture of collaboration, trust and accountability, thereby leading to more sustainable and equitable business practices. Employee directors are already a key feature of corporate governance in many European countries, where laws mandate or encourage worker participation at the highest levels of decision-making. The trend towards more inclusive corporate governance, particularly in Europe, reflects a growing recognition that employee involvement can contribute to more balanced and sustainable corporate decision-making.   In India, the concept of employee directors remains at a nascent stage. While there are no concrete legal mandates for employee directors in India, the changing corporate governance norms and labour reforms could encourage a shift towards greater worker participation in decision-making. In future, it is possible that India could adopt more structured approaches to employee representation, especially in light of growing discussions on labour rights, equality, and corporate responsibility. As the country continues to integrate into the global economy and adopt best practices in corporate governance, the inclusion of employee voices, whether through formal board membership or other participatory mechanisms, could become a significant part of the corporate governance landscape. #employeedirector #board #boardofdirectors #corporategovernance #employeerepresentative #labourcode #inclusiveboard

In today’s business landscape, Environmental, Social, and Governance (ESG) factors are no longer just buzzwords—they are central pillars of sustainable corporate strategy. While much of the ESG conversation has focused on environmental responsibility and governance practices, the ‘Social’ aspect, particularly its impact on employee well-being, has often been ignored. But there is no denying the fact that companies that prioritize the well-being of their employees as part of their ESG strategies are not only fulfilling their ethical obligations but are also creating a more productive, engaged, and loyal workforce. ESG (Environmental, Social, and Governance) initiatives should have a positive and transformative impact on an organization's workforce, as they demonstrate a commitment to sustainability, ethical practices, and social responsibility.     In the light of the recent unfortunate death of Ms. Anna Sebastian Perayil, a young 26-year-old Chartered Accountant, employed at the Pune office of one of the ‘Big 4 firms’, the discussion on why and how employers must own up their responsibility for the well-being of their employees as a part of their ESG initiative, becomes all the more important. As per a letter to the Chairman of the firm by her mother, that became viral on social media, Anna is believed to have succumbed to work pressure and excess workload. It is, therefore, a high time for us, professionals, to address this ‘S’ factor of ESG and how it reflects on our work culture and the pressure and stress that we assume in our approach to work and/or ‘put’ on our juniors as part of their job responsibilities. This article is dedicated to all professionals, seniors and juniors alike, and is especially meant to draw the attention of those who sit on the delegation chairs and control the work hours, work environment and above all, the well-being of their juniors.    The Growing Importance of ESG in the Workplace   As more organizations embrace ESG, they recognize that the ‘Social’ component is more than just philanthropy or community engagement—it is about how companies treat their people. Employees are an organization’s most valuable asset, and companies that incorporate employee well-being into their ESG framework position themselves as leaders in social responsibility. This approach aligns with broader goals like enhancing workplace culture, increasing job satisfaction, and building a sustainable future. Employee well-being is increasingly viewed as a crucial indicator of a company’s social performance, and investors, customers, and employees themselves are paying close attention to how well companies live up to these standards.   The Relationship Between ESG and Employee Well-being   A strong focus on ESG directly contributes to employee well-being in several ways. In the following paragraphs, I will discuss a few areas where a company can impact the well-being of its employees:   1. Mental and Physical Health   ESG initiatives often include robust health and wellness programs that address both the mental and physical aspects of employee health. This may involve providing access to mental health support, stress management programs, or wellness initiatives such as fitness memberships, mindfulness workshops, or ergonomic office environments. Companies with a strong ESG focus are more likely to support mental health through initiatives like counselling services, flexible working hours, or mental health days, which help reduce burnout and enhance employee resilience.   2. Work-life Balance   A major component of employee well-being is the ability to balance work and personal life. ESG-conscious companies are often pioneers in flexible working arrangements, such as remote work, hybrid work models, and flexible hours, which empower employees to manage their time better. These companies recognize that work-life balance is crucial for long-term employee health and productivity. By offering the flexibility to meet personal and family commitments, companies create an environment that reduces stress, improves morale, and increases overall job satisfaction.   3. Diversity, Equity, and Inclusion (DEI)   The social pillar of ESG emphasizes diversity, equity, and inclusion (DEI) in the workplace. By fostering an inclusive environment where all employees, regardless of background, gender, or race, feel valued and supported, companies can enhance well-being. Employees in inclusive environments tend to experience higher job satisfaction, stronger engagement, and less stress. DEI initiatives also ensure that marginalized groups have equal opportunities for advancement and fair treatment, reducing workplace inequalities that can lead to stress and dissatisfaction.   4. Safe and Supportive Work Environments   ESG frameworks demand a strong commitment to workplace safety and healthy working conditions. Employees who feel safe at work—both physically and psychologically—are more likely to be productive and engaged. This includes maintaining high safety standards, especially in industries where physical labour is involved, and creating harassment-free workplaces where employees feel secure to express their ideas and concerns without fear of discrimination or retribution. Additionally, ESG-driven companies are likely to implement policies that support psychological safety, encouraging open dialogue and a culture of trust.   5. Fair Compensation and Benefits   Another way ESG impacts employee well-being is through equitable pay and benefits. Companies that prioritize ESG focus on providing fair wages, competitive benefits packages, and retirement plans. These not only meet ethical labour standards but also contribute to employees' financial security, reducing stress and fostering loyalty. When employees feel that they are compensated fairly and have access to important benefits, they experience lower financial anxiety and a greater sense of security and motivation.   Long-term Benefits of ESG on Employee Well-being   Incorporating employee well-being into ESG strategies isn’t just about meeting moral obligations—it also provides tangible benefits for businesses. Here are some of the long-term advantages:   1. Increased Employee Retention and Loyalty   Strong ESG initiatives emphasize employee safety and mental well-being, creating a safer, more supportive workplace. Employees who feel supported and valued are more likely to stay with their employer for the long term. This reduces turnover rates and the costs associated with hiring and training new employees. A company that cares for its workforce fosters loyalty, as employees feel invested in the company’s mission and values.   2. Improved Productivity and Innovation   Healthy, satisfied employees are more productive and motivated. They are also more likely to contribute creative ideas and innovations, as they feel empowered and energized to bring their best selves to work. This directly impacts the company’s bottom line and long-term success.   3. Enhanced Reputation and Attractiveness to Talent   A company with a strong ESG commitment, especially to employee well-being, attracts top talent. Today’s workforce, particularly younger generations, prioritizes working for organizations that demonstrate social responsibility. A positive reputation for caring for employees will draw in skilled workers and enhance the company’s competitiveness in the job market. ESG initiatives can lead to a sense of pride and loyalty, reducing turnover as employees align with the company’s mission.   4. Positive Impact on Stakeholder Relations   Investors, consumers, and other stakeholders are increasingly focused on companies with strong ESG practices. Businesses that prioritize employee well-being as part of their ESG agenda are more likely to gain the trust and support of stakeholders who value ethical practices, long-term sustainability, and social impact.   5. Accountability and Ethical Leadership   Clear and transparent leadership that communicates ESG goals and progress can empower employees and create a sense of accountability within the workforce. A focus on strong governance instils a culture where employees are encouraged to act ethically, reducing misconduct and aligning business practices with global standards.   Now, coming back to our original case, ESG is much more than a corporate responsibility trend—it is a framework for building sustainable, ethical, and thriving organizations. By prioritizing employee well-being within their ESG strategies, companies are investing in their most critical resource: their people. This not only leads to healthier, more satisfied employees but also drives better business outcomes, including higher productivity, enhanced loyalty, and a stronger reputation. Overburdening employees with work can lead to negative public perceptions of a company, damaging its reputation among customers, investors, and stakeholders who prioritize ESG criteria in their decision-making. Ethical treatment of employees is a core value in ESG, and failing to adhere to it can result in reputational damage.   Non-compliance with ESG Regulations   Many ESG frameworks align with global labour standards set by organizations such as the International Labour Organization (ILO). Overloading employees can lead to violations of these standards, especially regarding excessive work hours and unhealthy working conditions. As governments and international bodies increasingly integrate ESG standards into legal frameworks, overworking employees could lead to violations of labour laws and ESG-related regulations. This exposes companies to fines, legal battles, and regulatory scrutiny, all of which are detrimental to sustainable business operations.   Summing up, as ESG continues to shape the future of business, organizations that place employee well-being at the forefront of their strategy will be better positioned for long-term success in an increasingly socially-conscious world.   #esg #employeewellbeing #AnnaSebastianPerayil #charteredaccountant #bigfour #overwork

In the world of corporate governance, the influence of shareholders has evolved over the years from passive oversight to active participation in steering important company decisions. This ‘shareholder activism’ that was once considered a niche activity, has now become a global phenomenon, with institutional investors, activist funds, and even retail shareholders increasingly holding the Boards accountable. The rise of proxy advisory firms, which guide shareholders on voting matters, has further democratised this power. While the western world has been at the forefront of this movement, shareholder activism in India has also been gaining momentum, thereby signaling a significant shift in corporate governance in the country.   The Rise of Shareholder Activism   Globally, shareholder activism has transformed how companies operate. Activists often target underperforming companies, demanding strategic changes such as improved governance, better capital allocation, or even management reshuffles. Shareholder activism in the US has brought to the fore the power of shareholders to influence the fate of major corporations. Shareholder activism in the country began gaining traction in the 1980s with the rise of corporate raiders and hostile takeovers, driven by big investors and financiers like Carl Icahn or T. Boone Pickens. These activists sought to overhaul management and restructure companies for higher returns. During the two decades starting from 1990, there was increase in involvement of institutional investors who pushed for better corporate governance and accountability in the country. The focus shifted in the 2010s towards environmental, social, and governance (ESG) issues, with activists advocating for sustainable practices and diversity. Today, shareholder activism continues to shape corporate policies, emphasizing transparency, accountability, and long-term value creation.   Shareholder activism in Europe gained momentum in the early 2000s, driven by a push for improved corporate governance and transparency. The introduction of the Shareholder Rights Directive in 2007 by the European Union aimed to empower investors by enhancing their voting rights and engagement. Activists, including institutional investors and hedge funds, began to influence corporate policies, focusing on executive remuneration, board diversity, and environmental sustainability. In recent years, European shareholder activism has increasingly addressed ESG issues and corporate social responsibility, reflecting broader societal concerns. Regulatory reforms and increased shareholder engagement have further shaped the evolution of activism across European markets. With stricter regulatory frameworks and increased pressure from socially conscious investors, European companies face scrutiny over sustainability, labour practices, and diversity on their boards. Activists are not just looking for financial returns; they are advocating for long-term value through responsible governance.   The Role of Proxy Advisory Firms   Proxy advisory firms, which provide voting recommendations to shareholders, play a key role in facilitating shareholder activism. By advising on issues like executive compensation, board elections, and mergers, these firms help ensure that shareholders have the information they need to make economically sound decisions. This increases the effectiveness of shareholder activism by enabling informed voting on key issues, which can ultimately lead to better corporate performance and governance. Proxy advisory firms also level the playing field, particularly for institutional investors who may not have the resources to conduct in-depth research on every issue. By providing guidance on governance and strategic matters, they help improve decision-making and enhance economic outcomes for companies and shareholders alike.   Shareholder activism in the US is often bolstered by big proxy advisory firms like the Institutional Shareholder Services (ISS) and Glass Lewis & Co., which provide voting recommendations to institutional investors. These firms analyse company performance, board structure, executive compensation, and ESG practices, giving shareholders the necessary data to make informed decisions. Their influence in shaping shareholder votes on critical matters, such as mergers, appointment of directors, compensation policies etc. cannot be understated.   Shareholder Activism in India: A Growing Force   Historically, Indian shareholders, especially retail investors, have played a limited role in influencing corporate decisions. But with increase in institutional investment, regulatory reforms, and greater awareness of corporate governance, shareholder activism in India is gradually gaining ground. Although the concept is relatively in a nascent stage in India as compared to that in the West, it is rapidly gaining importance.   There are many factors behind this gradual shift towards shareholder activism. At the top of it is the ever-widening regulatory framework implemented by the Securities and Exchange Board of India (SEBI) that has, over the years, shifted its focus to protection of the interest of the minority shareholders and promoting transparency. This has got the much-required fillip with the introduction of the Companies Act, 2013 also.   Another big reason behind increased shareholder activism in India is the country’s growing institutional investor base, both domestic and foreign, that has begun to adopt global best practices in corporate governance. These investors are increasingly voting against resolutions they deem detrimental to shareholder value. For instance, the decision by several institutional investors to vote against excessive executive compensation packages and related-party transactions has set a precedent for more accountability in Indian boardrooms.   As for the retail investors, they are also getting more involved due to improved access to information and growing awareness of their rights. The rise of online platforms and shareholder advocacy groups is providing a voice to individual investors who historically felt sidelined by institutional shareholders and large promoters.   The Role of Proxy Advisory Firms in India   Proxy advisory firms in India have played a pivotal role in the growth of shareholder activism in the country. Proxy advisors are driving greater transparency by offering independent assessments of company performance, executive compensation, and governance structures. By scrutinizing resolutions with respect to promoter remuneration, related-party transactions, board composition, appointment of directors, mergers, dividend policies, and ESG matters they empower shareholders to challenge corporate decisions that may not align with their interests. In India, firms such as Institutional Investor Advisory Services (IiAS) and Stakeholders’ Empowerment Services (SES) have emerged as key players in advising institutional and retail shareholders on corporate governance issues.   However, the role of proxy advisory firms in India has not been without controversy. Some companies and promoters view their recommendations as intrusive, especially when they challenge deeply entrenched promoter-led managements. Furthermore, there have been calls for stricter regulation of proxy advisory firms to ensure that their recommendations are unbiased and based on thorough research.   But despite these challenges, the growing influence of proxy advisory firms in India can hardly be denied. Their role is becoming increasingly important as shareholder activism continues to rise, especially in cases where minority shareholders seek to hold promoters and boards accountable.   Methods of shareholder activism   Here are the primary methods of shareholder activism in India:   1. Voting Rights: Shareholders can exercise their voting rights on key resolutions, including mergers, acquisitions, appointment of directors, and compensation of executives. Institutional investors, in particular, use their votes to influence company decisions. Proxy voting is a common method where shareholders authorize another party (like an institutional investor or a proxy advisory firm) to vote on their behalf at shareholder meetings.   2. Filing Shareholder Resolutions: Shareholders can file resolutions or proposals to be voted upon at a company’s annual general meeting (AGM). These resolutions may pertain to governance reforms, changes in company strategy, or environmental and social issues. Shareholders may propose a resolution calling for better environmental sustainability practices or higher transparency in financial disclosures.   3. Engagement with Management: Activist shareholders can engage directly with the company’s management or board of directors to express concerns or propose changes. This dialogue often happens behind the scenes before any public actions are taken. Shareholders may meet with management to discuss concerns about underperformance or strategic direction.   4. Proxy Battles: Shareholders may attempt to gain control or influence over a company by encouraging other shareholders to vote against management proposals or to support their own board candidates. An activist investor might run a campaign to replace certain board members with their own nominees if they believe the current board is underperforming.   5. Legal Action: Shareholders can take legal action if they believe that the company’s management or board has violated corporate governance norms or shareholder rights. This can include filing lawsuits or approaching regulatory bodies like the Securities and Exchange Board of India (SEBI). If minority shareholders believe they are being oppressed or mismanaged, they can take their case to the National Company Law Tribunal (NCLT) under the Companies Act.   6. Public Campaigns: Shareholders can launch public campaigns to put pressure on the company through media outlets or social media. This is a tactic often used to gain public support and sway other shareholders.   7. Class Action Suits: The Companies Act, 2013, allows shareholders to file class action suits against the company, its auditors, or other relevant parties for any act that is prejudicial to their interests (e.g. company’s financial disclosures were misleading). This method allows a group of shareholders to act collectively.   8. Institutional Investor Activism: Institutional investors like mutual funds, insurance companies, and pension funds often hold significant stakes in companies and can influence management through their voting power or engagement. SEBI has encouraged greater participation of institutional investors in governance through the Stewardship Code.   9. Collaborating with Proxy Advisory Firms: Shareholders can seek advice from proxy advisory firms, which provide research, analysis, and voting recommendations on corporate governance issues. These firms have become influential in shaping shareholder decisions.   10. Activist Investor Funds: Some funds specialize in investing in companies where they see potential for improvements in governance or strategy. These activist investors typically acquire significant stakes in underperforming companies to push for changes that would increase shareholder value. For instance, an activist fund might buy shares in a poorly performing company and advocate for the replacement of the CEO or the sale of non-core assets.   5 notable instances of shareholder activism in Corporate India   (i) Tata Motors – resolution to increase remuneration of directors (2014) In 2014, a resolution of Tata Motors Ltd. to pay remuneration to its former MD, Karl Slym, who unfortunately had died in January that year, and to two of its executive directors in excess of permissible limits, was rejected by minority shareholders resulting in it not getting 75% votes in favour. The company had incurred loss in the past two quarters, and hence, it had to take stockholder approval because of ‘inadequacy of profit’. But India’s largest auto maker failed to get approval for these resolutions. The act of the minority shareholders at that time was unprecedented, marking the beginning of an era of activism.   (ii) Tata Sons – Controversy around removal of Cyrus Mistry (2016) The Tata Sons-Cyrus Mistry controversy highlighted the role of shareholder activism in corporate governance. In 2016, Cyrus Mistry was abruptly and unceremoniously removed as the Chairman of Tata Sons, leading to a high-profile legal battle. Mistry, backed by minority shareholders, viz., Cyrus Investment Pvt Ltd and Sterling Investment Corporation Pvt Ltd, moved the NCLT Mumbai raising concerns about the governance practices, transparency, and decision-making at Tata Sons. Shareholders, including institutional investors, became more vocal, demanding greater accountability from the Tata Sons board. The controversy showcased how shareholders can challenge decisions they view as detrimental to the company's interests, using legal avenues and public forums to influence corporate actions and governance in a major conglomerate like Tata Sons.   (iii) NR Narayana Murthy Controversy (2017) Narayana Murthy, Infosys' founder and a significant shareholder, publicly criticized the company's Board and the then CEO Vishal Sikka over issues like executive compensation, corporate governance, and transparency in a major acquisition. His activism, supported by other shareholders, put pressure on the board leading to Sikka's resignation. This episode highlighted how influential shareholders, especially founders with large stakes, can challenge board decisions and leadership, influencing corporate governance and ensuring accountability, even at large, professionally managed companies like Infosys.   (iv) Raymond Limited case (2017) This case highlighted the role of shareholder activism in family-owned businesses. In this instance, Raymond's minority shareholders, led by activist investor Amal Parikh, opposed the company's decision to sell prime real estate in Mumbai to its promoter, Gautam Singhania, at an ‘undervalued price’. The activists raised concerns about transparency, fairness, and governance in related-party transactions. Shareholders demanded higher accountability and pushed for better corporate governance practices, eventually leading to increased scrutiny over the deal.   (v) L&T – Mindtree Acquisition (2019) The Larsen & Toubro (L&T) acquisition of Mindtree in 2019 showcased the role of shareholder activism in mergers and acquisitions. L&T had initiated a hostile takeover by acquiring a significant stake in Mindtree, despite resistance from the latter's founders and management. Mindtree's founders, supported by some shareholders, publicly opposed the acquisition, citing concerns over corporate culture and strategic fit. However, L&T's strong shareholder backing, including institutional investors, enabled it to proceed with the acquisition. This case illustrated how shareholder support can influence the outcome of hostile takeovers, with institutional investors playing a decisive role in determining the future direction of a company.   The Economic Perspective of Shareholder Activism   Shareholder activism, once a fringe movement led primarily by small groups of investors, has grown into a mainstream force with significant economic implications for corporations, markets, and economies. From an economic perspective, shareholder activism plays a vital role in shaping corporate governance, resource allocation, and long-term value creation. Activists, often institutional investors or hedge funds, push for changes that can range from improving operational efficiency to revisiting capital allocation strategies and even overhauling management.   A. Enhancing Corporate Efficiency and Value Creation   At its core, shareholder activism seeks to maximize shareholder value by addressing inefficiencies within companies. Activist investors often target underperforming companies or those with management practices that do not align with shareholder interests. By pushing for reforms such as cost-cutting, restructuring, divestment of underperforming assets, or changes in corporate strategy, activists aim to enhance the overall performance of a company. This focus on efficiency has a direct impact on the economic value of a company. By pressuring management to be more accountable and focus on shareholder value, activism helps ensure that companies are using their resources optimally.   B. Better Capital Allocation   Often a key demand of shareholder activists is related to capital allocation, particularly the usage of excess cash. Many companies accumulate large cash reserves without clear strategies for investment or return. Activists often push for shareholder-friendly policies such as stock buybacks, increased dividends, or strategic mergers and acquisitions (M&A). By advocating for efficient capital deployment, activists seek to optimize the company's balance sheet, ensuring that excess capital is reinvested in growth opportunities that generate higher returns.   C. Corporate Governance and Accountability   From an economic standpoint, shareholder activism enhances corporate governance, which in turn improves the overall economic performance of firms. Poor governance practices, such as overcompensation of executives, lack of board independence, or weak accountability mechanisms, can erode shareholder value over time. Activists often target companies with governance deficiencies, demanding reforms such as better alignment of executive compensation with company performance, enhanced board oversight, and greater transparency in decision-making. By addressing these governance issues, activism contributes to a more efficient allocation of resources within firms, ensuring that managerial decisions are closely aligned with shareholder interests. This improves not only the financial health of individual companies but also the broader market.   D. Short-Termism vs. Long-Term Value   One of the key economic criticisms of shareholder activism is that it can promote short-termism. Critics argue that activists, particularly hedge funds, push for quick gains, such as cost-cutting, buybacks, or asset sales, that may benefit short-term stock performance but potentially harm long-term strategic objectives. The pressure to deliver short-term returns can lead companies to underinvest in research and development (R&D), innovation, or long-term projects, which can have broader economic consequences. However, recent study shows that while some activists may prioritize short-term profits, many focus on long-term value creation, like, better governance, more efficient capital usage, ESG, etc. These contribute to sustainable growth, job creation, reduced carbon footprint and overall economic prosperity.   E. Market Efficiency   Shareholder activism can also improve market efficiency. By identifying undervalued companies or those with poor governance, activists contribute to price discovery in the market. When activists announce their involvement in a company, stock prices often adjust to reflect the anticipated improvements in governance or strategy, thus helping markets more accurately price the value of firms. This allows investors to make better-informed decisions.   F. Economic Implications for Stakeholders   While shareholder activism primarily focuses on maximizing shareholder value, its economic implications can extend to other stakeholders, including employees, suppliers, and customers. Activist-driven changes, such as cost-cutting or layoffs, can have adverse effects on employees and the broader economy in the short term. However, if activism leads to a more sustainable business model, the long-term economic benefits can outweigh these short-term disruptions. For instance, by pushing companies to be ESG compliant activists can help firms mitigate future risks, like regulatory fines or reputational damage, which can affect their economic performance.   Role of Corporate Governance in limiting shareholder activism   Effective corporate governance practices can significantly reduce the risk of shareholder activism by fostering transparency, accountability, and informed decision-making. Key practices that can help prevent shareholder activism include:   Effective Board Composition : A board that brings together a variety of skills, experiences, diversity and perspectives ensures effective oversight and decision-making. Independent directors should be included to provide an impartial view of the company’s operations. Consistent Shareholder Engagement : Regular communication with shareholders and responsiveness to their concerns builds trust and helps mitigate the risk of shareholder activism. Comprehensive Risk Management : Companies should implement robust risk management systems to identify and mitigate potential risks, preventing financial losses or negative events that could spark activism. Clear Stakeholder Communication : Maintaining transparent and efficient communication with stakeholders ensures they are well-informed about the company’s strategy, performance, and challenges, thereby reducing the chances of any rumour or misinformation that might led to activism. Strong Compliance Framework : A robust compliance framework helps companies adhere to regulatory requirements and avoid legal issues that could lead to shareholder activism. Transparent Disclosure of Related-Party Transactions : When policies around identifying, approving, and disclosing related-party transactions are transparent, this helps maintain trust and prevent shareholder concerns. Effective Conflict of Interest Management : Proper management of conflicts of interest, particularly within board composition and related-party transactions, is essential for maintaining corporate integrity. Commitment to Corporate Social Responsibility : Adopting sound Corporate Social Responsibility (CSR) practices, especially those that further the ESG (Environmental, Social, and Governance) standards, can foster trust with stakeholders and attract ESG-focused investment.   Limitations of Shareholder Activism   Shareholder activism comes with its own share of challenges or limitations. The following are the important limitations:   Short-term Focus : Activist shareholders often seek quick financial gains, which can jeopardize the company’s long-term growth, stability, and strategic vision. High costs : Shareholder activism can incur significant legal, administrative, and operational costs for both the company and the activists, potentially reducing profitability. Time-Consuming : Responding to activist demands often requires considerable time and effort from management and the board, slowing down decision-making and operational efficiency. Management Distraction : Activism may divert management’s focus from core business activities, affecting day-to-day operations and long-term strategic objectives. Increased Volatility : Activist efforts can create uncertainty, leading to stock price fluctuations and market instability, which may harm the company’s reputation and long-term financial performance. Prioritizing interests of a few : Activist campaigns may prioritize the interests of a small group of shareholders, potentially overlooking the broader interests of all stakeholders, including employees, customers, and communities. Potential for Conflict : Shareholder activism can result in conflicts between activists, management, and other stakeholders, disrupting corporate governance and leading to power struggles that hinder effective decision-making.   Challenges and the Road Ahead   As shareholder activism continues to grow, both globally and in emerging markets like India, it is likely to play an increasingly important role in shaping corporate behaviour and driving economic growth. In India, such activism is still evolving, but it holds significant economic potential. The concentrated ownership structures in Indian companies, where promoters often hold a majority stake, pose challenges for minority shareholder, unlike in Western markets, where dispersed ownership allows greater activism. In addition, historically India has had a passive retail investor base. However, as institutional investment grows and regulatory reforms strengthen, shareholder activism is becoming a tool to improve corporate accountability and governance.   The economic benefits of shareholder activism in India are already visible in cases where activist investors have pushed for better capital allocation, more transparent governance, and the resolution of conflicts of interest in promoter-driven companies. These improvements can enhance firm performance, reduce agency costs, and attract more foreign investment, contributing to India’s broader economic growth.   India’s evolving regulatory landscape, driven by the push for transparency, from SEBI, the market regulator, holds promise. SEBI’s guidelines on related-party transactions, independent directors, and shareholder voting rights have empowered investors, particularly institutional ones, to challenge entrenched interests. Running parallel to this is the stricter implementation of the Companies Act, 2013 by the MCA that ensures the protection of shareholders’ rights and overall good corporate governance.   As India’s capital markets mature and retail participation increases, shareholder activism will likely gain further momentum. Proxy advisory firms are expected to continue to play an important role in analysing and providing recommendations to empower investors. The growing emphasis on ESG issues and long-term value creation will also reshape the nature of activism, making it more holistic rather than purely financial. #shareholder #shareholderactivism #activism #proxy #proxyadvisory #corporategovernance

Technology, if properly used, is a great boon for mankind. It can improve productivity through time-saving tools. Being an avid writer, knowing some keyboard shortcuts has always helped me in saving time. Today, I want to share some of these tools for all my readers that will help you do common tasks with just a few key strokes. For those who use Windows regularly, the shortcuts mentioned in this article will be very useful in saving time and increasing productivity. While some of these shortcuts are quite well-known already, majority of them will be new to most readers. Interestingly, they always existed in Windows, just that we didn’t quite explore them. Navigating them will make excelling in Windows just a cakewalk. All keyboard shortcuts require the users to press two or more keys together or in a specific order. For instance, to ‘undo’ a text, the shortcut is Ctrl + Z and the two keys Ctrl (Control) and Z are to be pressed in that order, i.e. press and hold the Ctrl key, then press the X key, and then release. Most shortcuts come with the keys Ctrl (Control), Fn (Function), Windows or Alt (Alternate). These four buttons are placed at the bottom-left corner of the keyboard, left of the space bar. The following is a table of some keyboard shortcuts: Summing up Thanks to advancement in technology most of us professionals are on our computers more than ever, with heavier workloads and lesser time. Saving time and increasing productivity per unit of time is very important. To a large extent, keyboard shortcuts can make this a reality. These shortcuts make creating documents on computer or laptops very much easy, however, to avail that facility, it is important to memorize all these and get into the habit of using these keyboard shortcuts regularly. #keyboard #keyboardshortcuts #shortcuts #windows #keys #keyboardhacks #hacks #coolhacks #computer #laptop #easytyping

We have oftentimes come across news items wherein doctors and other persons in the medical profession have been charged of negligence under the Consumer Protection law, leading to them being more cautious in their work. Now, it is the turn of professionals like Company Secretaries (CS), Chartered Accountants (CA) and Cost Accountants (CMA) to be more cautious in the performance of their professional duties as a government notification dated 3rd May 2023 have brought all these three professions within the ambit of a much-dreaded law – the Prevention of Money Laundering Act, 2002 or simply the PMLA. So, what does it really mean for the professionals? Why do they tend to suddenly feel being in deep water now? In this article, I will elaborate on the scope and objective of this Act and the enhanced responsibility put on the shoulder of these professionals to curb money laundering in the country. In order to set the tone for discussion on this topic, let us first dive a little deeper into what the PMLA is all about. So let us have a look at some important points from the Act. Prevention of Money Laundering Act, 2002 The Prevention of Money Laundering Act, 2002, which, along with the rules framed thereunder, came into force w.e..f. 1st July, 2005, was enacted by the Parliament of India with a view to preventing the heinous activity of money-laundering in the country. The idea behind was to aid the global efforts against money laundering and related crimes. With a view to combatting such illegal activities, apart from strict punishment, including imprisonment, the Act also provided for confiscation of any property acquired from or through laundered money. Definition of Money Laundering Section 3 of PMLA defines the term as follows: “Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money-laundering. *Explanation – (i) For the removal of doubts, it is hereby clarified that – (i) a person shall be guilty of offence of money-laundering if such person is found to have directly or indirectly attempted to indulge or knowingly assisted or knowingly is a party or is actually involved in one or more of the following processes or activities connected with proceeds of crime, namely – (a) concealment or (b) possession or (c) acquisition or (d) use or (e) projecting as untainted property or (f) claiming as untainted property in any manner whatsoever (ii) the process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is directly or indirectly enjoying the proceeds of crime by its concealment or possession or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever – Section 3 of Prevention of Money Laundering Act as amended w.e.f. 1-8-2019. *The explanations were added in an amendment in 2019. Inter-connected transactions Where a certain transaction involves two or more transactions that are inter-connected and one or more of such transactions are found to have involved money laundering, then the other transactions shall also be presumed to come under money-laundering as inter-connected transactions and accordingly shall be subject to adjudication or confiscation. Financial Intelligence Unit – India (FIU-IND) This unit was set by the Government of India in 2004 as a central agency to receive, process, analyse and disseminate information relating to financial transactions alleged to be related to money laundering. It is an independent body reporting directly to the Economic Intelligence Council (EIC) headed by the Finance Minister of India. Under the PMLA Act and Rules, banking companies, financial institutions and intermediaries are under obligation to verify the identity of clients, to maintain records and furnish necessary information in prescribed format to the Financial Intelligence Unit - India, in short, the FIU-IND. Person Carrying on Designated Business or Profession Section 2(1)(sa) defines “person carrying on designated business or profession”. Until before the notification under discussion, the following persons were included within the definition: (i) a person carrying on activities for playing games of chance for cash or kind, and includes such activities associated with casino; (ii) Inspector-General of Registration appointed under section 3 of the Registration Act, 1908 (16 of 1908) as may be notified by the Central Government; (iii) real estate agent, as may be notified by the Central Government; (iv) dealer in precious metals, precious stones and other high value goods, as may be notified by the Central Government; (v) person engaged in safekeeping and administration of cash and liquid securities on behalf of other persons, as may be notified by the Central Government; or Sub-section 2(1)(sa)(vi) authorises the Central Government to designate by notification when certain other activities performed for or on behalf of another natural or legal person will come under the ambit of money laundering, or in other words, to designate other persons carrying on designated business or profession. Notification number S.O. 2036(E) was issued under this provision on 3rd May 2023 to include in the definition of “person carrying on designated business or profession” a ‘relevant person’ carrying on certain activities on behalf of their client shall be. The term ‘relevant person’ has been defined in the explanation to mean a practising Company Secretaries (CS), a practising Chartered Accountants (CA) and a practising Cost Accountants (CMA). Hence CSs, CAs and CMAs are now persons carrying on designated business or profession. Reporting Authority Section 2(1)(wa) of PMLA defines ‘reporting entity’ as a banking company, financial institution, intermediary or a person carrying on a designated business or profession. The role of a reporting entity under PMLA is the following: Maintenance of records of all transactions in such manner as to enable it to reconstruct individual transactions (for a period of five years from the date of transaction between a client and the reporting entity) Furnish to the Director within such time as may be prescribed, information relating to such transactions, whether attempted or executed, the nature and value of which may be prescribed Maintenance of record of documents evidencing identity of its clients and beneficial owners as well as account files and business correspondence relating to its clients (for a period of five years after the business relationship between a client and the reporting entity has ended or the account has been closed, whichever is later) Every information maintained, furnished or verified, except as otherwise provided under any law for the time being in force, shall be kept confidential by the Reporting Authority. The Director under the Act may call for from any reporting entity any of the above records and the reporting entity is required to furnish to the Director such information within such time and in such manner as may be specified. Every such information sought by the Director must be kept confidential. Section 12AA of PMLA requires the reporting authority to ensure enhanced due diligence prior to commencement of each specified transaction as follows: (a) verify the identity of the clients undertaking such specified transaction by authentication under the Aadhaar (b) take additional steps to examine the ownership and financial position, including sources of funds of the client, in such manner as may be prescribed (c) take additional steps as may be prescribed to record the purpose behind conducting the specified transaction and the intended nature of the relationship between the transaction parties In case if the client fails to fulfil the conditions listed above, the reporting entity must not allow the specified transaction to be carried out. If any specified transaction or series of specified transactions undertaken by a client is considered suspicious or likely to involve proceeds of crime, the reporting entity shall increase the future monitoring of the business relationship with the client, including greater scrutiny or transactions in such manner as may be prescribed. The information obtained while applying the enhanced due diligence measures must be maintained by the reporting authority for a period of five years from the date of transaction between a client and the reporting entity. Explanation u/s 12AA defines ‘specified transaction’ to mean— (a) any withdrawal or deposit in cash, exceeding such amount; (b) any transaction in foreign exchange, exceeding such amount; (c) any transaction in any high value imports or remittances; (d) such other transaction or class of transactions, in the interest of revenue or where there is a high risk or money-laundering or terrorist financing, as may be prescribed. Onus or burden of proof Where a person is accused of being involved in money laundering, the onus is on him to prove that the alleged proceeds of crime have actually been lawfully acquired by them. Punishment for money-laundering The PMLA prescribes a punishment of 3 to 7 years rigorous imprisonment to any person found guilty of money-laundering. However, if the offence also comes within the ambit of Narcotic Drugs and Psychotropic Substance Act, 1985, the maximum term of rigorous imprisonment shall be 10 years. Attachment of property The property acquired by using the proceeds of crime or the laundered money can be confiscated by the Adjudicating Authority. Adjudicating Authority In terms of sub-section (1) of section 6 of the PMLA, an Adjudicating Authority has been constituted to exercise jurisdiction, powers and authority conferred by or under this Act. The Adjudicating Authority under PMLA has powers to regulate its own procedure and is not bound by the procedures laid down in the Code of Civil Procedure,1908. Appellate Tribunal Section 25 of the PMLA mandated the Central Government to establish an Appellate Tribunal to hear appeals against the Adjudicating Authority and other authorities under the Act. The section was amended in 2016 to provide that the Appellate Tribunal constituted under sub-section (1) of section 12 of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (SAFEMA) shall be the Appellate Tribunal for hearing appeals against the orders of the Adjudicating Authority and the other authorities under the PMLA also. This Appellate Tribunal under (SAFEMA) is one of the earliest tribunals in the country and also hears appeals under the Sea Customs Act, 1878, the Customs Act, 1962, the erstwhile FERA, 1947, the FERA, 1973, and those related to persons detained under the COFEPOSA whose detention orders were neither revoked by the Government nor set aside or quashed by the courts of competent jurisdiction, subject to the conditions specified in Section 2 of the Act. Orders of this tribunal can be appealed against in the appropriate High Court and finally to the Supreme Court. Notification dt. 3rd May 2023 Sub-section 2(1)(sa)(vi) authorises the Central Government to designate by notification when certain other activities performed for or on behalf of another natural or legal person will come under the ambit of money laundering. Under this provision, on 3rd May 2023, notification number S.O. 2036(E) has been issued by the Ministry of Finance, Department of Revenue, Government of India. As per this notification, the below-mentioned financial transactions carried out by a ‘relevant person’ on behalf of their client shall be considered as an activity relating to money laundering. The term ‘relevant person’ has been defined in the explanation to mean a practising Company Secretaries (CS), a practising Chartered Accountants (CA) and a practising Cost Accountants (CMA). The following financial transactions have been identified in the notification: Buying and selling of any immovable property; Managing of client money, securities or other assets; Management of bank, savings or securities accounts; Organisation of contributions for the creation, operation or management of companies; Creation, operation or management of companies, limited liability partnerships or trusts, and buying and selling of business entities. Hence, going forward practising CSs, CAs and CMAs will be covered under the scanner as and when they execute any financial transactions on behalf of a client. Members belonging to all the three professions are on thin ice now. Their vigilance, carefulness, due-diligence and strict professionalism will be tested more rigorously from now on. Concluding observations The new notification under PMLA is a bold step of the government towards speeding up its battle against anti-money laundering activities. The new provisions are expected to help probing against dubious transactions by shell companies involved in money laundering. But by providing an inclusive definition of ‘relevant person’ to include these three professions only, the government has clearly shown its intent of keeping practising advocates or any other person out of the net, although they might also be in the position to do any of the financial transactions identified in the notification as connected to money laundering, on behalf of the client. However, the more optimistic thinking on the part of these professionals would be to consider this move as a reassurance of the reliance the government has always had on these three professions, this time in its battle against money laundering. The proof of this can be found in section 2(1)(wa) of PMLA which now includes these three professions within the meaning of a ‘reporting entity’. Reporting authorities are mediums in the hands of the government for gaining information about dubious transactions. So, CS, CA and CMAs are now expressly clothed with the responsibility of being whistle blowers in case they come across any such transactions. If they are not careful enough, they will be hauled up for being partners in the crime of money laundering by their clients. If professionals have been handling the money of the client for financial transactions on their behalf whether in India or abroad, now it is a better idea for them to stay away from doing so. #PMLA #Moneylaundering #laundering #professional #reportingauthority #Enforcement #CS #CA #CMA

Corporate buzzwords or jargons, often also called business phrases or corporate metaphors, are important part of corporate life as they tend to simplify complicated concepts into a simple word or phrase. Frequent use of such phrases or terms makes it easy for the people in the organisation to understand and gradually becomes part of the corporate culture. Buzzwords are also said to improve employee engagement as difficult tasks seem to become simpler through usage of such jargons. Daily activities and objectives also often become interesting due to the use of such phrases. One might argue that sometimes the jargons are too complicated to understand, giving rise to the question as to why at all they exist. But think about it, explaining the same kind of work or activity, or procedure to be followed, especially when difficult concepts are involved, would not only be a time-taking exercise, but also boring to a large extent. So, the jargons actually save us time and prevent us from getting bored. They save time by using a simple term for a complicated concept. 5 popular business jargons Some business buzzwords may be organisation specific, or applicable to a particular industry only and impliedly, we are not dealing with the same. I would rather take up five such phrases or jargons that are frequently used in the corporate environment. Be it in an email, or in verbal communication, the use of a business jargon may also get one perplexed if he fails to understand its meaning. Also, some of us may have a vague idea about these jargons, some may interpret them wrongly. The idea behind this article is to help readers decipher the correct meaning of such jargons and use them correctly. All-Hands Meeting Such a meeting is also often referred to as ‘all employee meetings’, ‘company-wide meetings’, as also ‘town hall’ or ‘company scrum’ in the western world. It implies a company-wide meeting held on a regular basis when employees from all departments, their heads, people from the management and other stakeholders meet to discuss important matters of relevance to the company. Such meeting aims at updating everyone within the organisation about the status of the business. During this meeting all stakeholders come to know about the thoughts and ideas of the promoters and direction of the organisation, about new information, processes, awards, achievements and other updates. It helps bring transparency and clear confusions, if any. Ideally an All-Hands meeting is convened and presided over by a CXO and held at regular intervals, whether in physical or in virtual mode. Such meetings are different from team-building meetings which are directed towards strengthening the bond, trust and productivity of a certain team or department in an organisation. These meetings are the diametric opposite of one-on-one meetings. The purpose of such meetings is to keep everyone within the organisation informed and updated about the current state of its business and its future plans. Such meetings are an effective tool in the hands of the management to collect important feedback from employees, make major announcements, enhance employee motivation through awards or praises, encourage group brainstorming, allow participants to ask questions, address grievances and introduce new leaders within the organisation. The frequency of such meetings varies from company to company. Depending on the size and the industry to which it belongs, it might choose to have such meetings as frequently as ‘daily’, or weekly, or once every quarter or annually. Deep Dive into something Deep diving into something in a business scenario means a stricter and more thorough type of brainstorming on it. It is an intense, in-depth analysis of a topic, a problem or a situation in a shorter span of time. Once you deep dive into something, you get a better grip on that topic. Deep Diving helps in creation of ideas and also in understanding a problem and solving it better. So, when a senior asks an employee to deep dive into a certain subject or project, he is basically asking the latter to come up with a more detailed study and report by way of further brainstorming. Reinvent the wheel This jargon implies ‘wasting time in trying to do something that has already been done successfully’. It means to work on an idea or solution that one considers new or different, while in reality it is nothing better that something that already exists. So, basically, it means wasting time doing unimportant things, fiddling around or frittering away. The idea behind the use of this metaphor is to save valuable time and useless or unimportant efforts and is often meant as a warning or admonishment. Seniors often use the phrase to imply the futility of an activity of a junior. Circle back to something This business jargon essentially means coming back to a certain thing later or considering it again. This is considered to be the most used business phrase. So, it implies something two persons have already discussed and yet they want to return to it. It often indicates that there was a meeting where something was discussed, but nothing was finalised and the participants need to have yet another discussion on it. On the very face of it this jargon is about an activity that is useless and avoidable. This jargon, as per a study conducted in the US, is the most disliked business jargon. The concept is totally in favour of indecision and procrastination. So, people who like promptness and action, will always be annoyed or upset by the use of this business phrase, and one needs to be extremely careful before using this jargon. It might come off as the person saying this avoiding the other person, or putting off the discussion on the particular topic. Often the person using the phrase does so to buy some time to make a decision. But it also shows the lack of commitment on his side. Phone tag Phone tag, also called the telephone tag, is a situation where two parties try to contact each other by phone/telephone, but none of them is able to get a hold of the other person and end up not being able to have a conversation. In such situations the two persons are said to ‘play’ telephone tag. In the bygone era of wired telephones fixed to a particular place, it would often be because when one person calls the other person was out and vice versa. In today’s age of mobile phones this includes a situation when two persons trying to call each other are constantly busy on other calls. Telephone tag is often used as an excuse for not being able to connect with a person.

In this age of ever-increasing threats to cybersecurity, Shadow IT is a growing menace. It is a danger that hovers like dark cloud over the IT infrastructure of an organisation. However, there is no denying the fact that there are many benefits of Shadow IT as well. In this article I intend to discuss this new business jargon in more details. When IT was new, most applications were tested rigorously and purchased as packages that came with warranty. Today, there are IT applications for just about everything. And they are all available at the click of a button, and in most cases, even free of cost. What is Shadow IT? The term refers to any type of system, software, hardware, devices, applications or IT resources used by employees in the organisational network without the IT department's express approval and in most cases without even the IT department's knowledge. Such a practice can take place in various forms, and while it comes with many inherent benefits, it violates compliance norms and poses major threats to the security of IT infrastructure in an organization that include data leaks and other cybercrimes (detailed later). With the exponential growth of Information and Technology globally and the adoption of cloud-based services, the chances of threats to IT systems have also sky-rocketed. While there is no denying the fact that Shadow IT can enhance the productivity of employees and also encourage creativity and innovation, this rapid growth of cloud-based applications has also given rise to increased usage of shadow IT. Common Shadow IT applications Some of the best examples of Shadow IT are applications like Slack, Dropbox, Google Drive, Google Docs, Microsoft Office 365, Cloud storage services, Skype, WeTransfer, Excel Macros, various file compressing applications, messengers, various videotelephony software like Zoom, Microsoft Teams, servers, etc and hardware like personal computers or laptops, tablets and smartphones. Why Shadow IT? The question arises, why at all does Shadow IT exist? The answer is simple. Firstly, getting the exact application one needs right at that moment of need, may be difficult in an organisational perspective as it has to pass through various time-consuming stages of proposal, review, rigorous testing and final purchase. Secondly, we often tend to be more comfortable with applications we use personally on a day-to-day basis and we often tend to take initiative to popularise such applications amongst our peers in the organisation. Thirdly, the recent concept of ‘Bring Your Own Device’ or BYOD (allowing employees to use their own laptops or smartphones in office) has contributed to the exponential rise of Shadow IT. Benefits of Shadow IT Despite its risks, shadow IT has its benefits, some of which are as follows: Adoption of Shadow IT applications is lucrative as it is simple to work on. In many cases Shadow IT is more efficient because its market is competitive. Shadow IT applications are available at the click of a button Taking approval from IT department for purchase of a particular software application often takes time and in contrast, using Shadow IT applications is fast and there is no wastage of time. And we all know that time is money. Examples of Shadow IT To understand the concept better, let us take a few practical examples of Shadow IT: An employee stores sensitive information in a shadow IT cloud application. An employee discovers a more effective and faster file-sharing application than the one approved by the in-house IT department, and starts using it. Gradually the usage also spreads to other members of the organisation. File sharing through applications like Google Docs can lead to data leak. An employee who intends to complete a certain task at home but does not carry office device to home sends the work documents to his personal email id. This exposes the confidential organisational data to networks that are beyond the control and monitoring of the IT department. Shadow IT Risks I must clarify here, I have no intention of stating that Shadow IT is bad, it is inherently not dangerous. But sometimes mindless usage may result in menaces like data leaks and compromise of security. Shadow IT not only results in technological risk, but also business risk and reputational loss. The following are some specific risks associated with usage of Shadow IT: Extended attack surface as any device connected to the network gets exposed to potential cybercriminals Because of Shadow IT an organization may lose confidential data or control over any data Shadow IT may result in regulatory or legal non-compliance An organisation may lose vital client or other information where an employee stores sensitive information in a shadow IT cloud application and the same becomes the victim of a cyberattack Any data leakage or cyberattack could result in financial loss for the organisation that might include costs associated with data retrieving, legal costs, costs involved in salvaging reputation etc. Managing Shadow IT and reducing associated risks As information and technology continues to grow and keep innovating, it is expected that Shadow IT applications will also increase, and in a large way it will dominate our lives, both personal and professional. However, adopting certain checks and best practices might help organizations reduce the risks associated with usage of Shadow IT. The following are some such preventative measures that can contain the menaces of Shadow IT: Discovering the Shadow ITs being used is the first step towards finding the solution The inhouse IT department must know the needs of the employees Educating employees about Shadow IT and the risks associated with its usage Encouraging employees to monitor and manage unsanctioned applications Responsibility of cybersecurity must be built into the organisational culture. The idea is to find a middle ground between the IT department and business unit or user so that they can use some shadow IT while allowing the IT department control user permissions and data for those applications. To this end, organisations may need to rethink and redraft their internal codes and policies that clearly state to what extent and in what form Shadow IT is acceptable. Conclusion There are good sides of Shadow IT and bad sides as well. To run organisations in this age of increasing usage of information and technology, the best strategy is to find a middle path. Employees may be encouraged by the IT department to find efficient IT applications that work faster and answer their needs in the best way and IT department may in turn control the data and user permissions for such applications. This will also free up some time of the IT department for more strategic and business-specific IT work. #BYOD #ShadowIT #risk #cyber #cybercrime #cybersecurity

ESG is a relatively new concept and quite naturally, therefore, there is little awareness or understanding about it. Some organisations take ESG just as an extension of Corporate Social Responsibility (CSR). But that’s a very myopic view of ESG. It is a much larger concept that is related to investment decisions also. For businesses around the world, ESG is becoming increasingly important. The concept of ESG, first popularized in 2005, refers to a broad range of environmental, social and governance criteria on which the performances of companies are measured. The practices of a company with respect to these parameters have been rather neglected in the traditional system of financial reporting. However, in this article we will not delve deep into the intricacies of the concept, but instead we will try to find out the connection between the concept of ESG and corporate moral responsibility. But first of all, we need to start with a few definitions that are crucial to understanding this subject. Moral Responsibility Every individual is responsible for each of his/her activities or inactivities, decisions or indecisions and comments or silences. We are solely responsible for the impacts of all choices we make in our lives. While all such choices or actions do not necessarily have a ‘moral’ component in them, in our everyday life we often refer to certain things being the ‘moral responsibility’ of a certain person. By doing so we try to indicate that this certain person has some duties or obligations, meaning some responsibility, by a certain standard. Maintaining such responsibilities are expected of people both in their personal as well as professional capacities. In other words, these are their moral responsibilities. A person is held accountable for these duties and obligations. Corporate Moral Responsibility Having gone through the last paragraph, we now know what individual moral responsibility means. Now, the question arises, do businesses have moral obligations or responsibility too? Can the concept of moral responsibility be extended to artificial legal persons also? Is corporate social responsibility (CSR) different from corporate moral responsibility? For more than three decades now, the question as to whether companies can be held liable for their actions morally and psychologically, has been subject to heated debates around the world. Let us have a look at it. An organization is a group of people coming together wilfully to achieve a set of common goals. These individuals have collective accountability to all stakeholders. This collective accountability is referred to as corporate moral responsibility. The owner or manager of a business has multiple responsibilities, which include legal as well as moral responsibilities. The former implies maintaining various compliances, payment of taxes, corporate governance and so on while the latter imposes the obligation of doing what is right and accountability for all the actions of the business. Thus, corporate moral responsibility encompasses the entirety of opinions, decisions and actions with which individuals in charge of an organisation run it. The following are some of the examples of moral responsibilities of business: · Payment of fair and timely wages · Non-employment of child labour or forced labour · Workplace safety and healthy working environment · Non-discrimination amongst employees · Fair treatment of all employees · Making available safe and good quality products to customers · Accounting for social and environmental costs implemented CSR vs. Corporate Moral Responsibility One should definitely not confuse Corporate Moral Responsibility with Corporate Social Responsibility. Through the CSR framework, the regulators have ensured the contribution of certain profitable organisations towards the progress of the society. However, CSR does not have any scope for moral obligations of a business towards those whom it affects through its actions and to those who make a difference in it. Hence, corporate moral responsibility requires separate focus and emphasis. ESG ESG refers to what an entity has done or not done in the last financial year with respect to compliance of certain non-financial parameters that are required to be reported by it as a step forward towards serious sustainability movement globally. It is essentially used to evaluate non-financial factors like environmental impacts of a business, corporate sustainability and social responsibility. The sustainability of an organisation is valuable to all its stakeholders like the investors, employees, consumers, supply chain partners, bankers etc. With a view to promoting this sustainability, ESG focuses on the environmental, social and governance practices of an organisation that have been rather neglected in the traditional system of financial reporting. An organisation adopting ESG principles essentially means that in its corporate strategy it focuses on the three pillars of environment, social, and governance. Adopting ESG is an expensive and time-consuming exercise, but it yields returns in the future in the form of sustainability and greater investor trust. ESG reporting brings in transparency about the organisation’s activities, the risks it is exposed to and the measures it adopts to mitigate those risks and to ensure sustainability. The ESG Reporting requires an organisation to collect, analyse and disclose its ESG data. Both the availability and quality of ESG data collected and reported by an organisation are crucial from the standpoint of the stakeholders. ESG and corporate morality ESG can very well be described as the moral duty of a business. It mainly encompasses the moral impact of the business activities and governance of an organisation. ESG makes organisations look beyond their economic activities and apply considerations of ethics and morality in making better business decisions and developing more robust strategies. In the business world, until very recently, the moral obligation of businesses were restricted to compliance of law in letter. To a certain extent morality was brought into businesses through the introduction of the stakeholder concept during the later part of the last century. Now with the introduction of #ESG, the concept of moral responsibility has been infused into businesses in a much greater way. Conclusion Today businesses are increasingly expected to do the ‘right thing’. Just as they contribute to social responsibilities, they are also expected to be morally responsible for their actions. To ensure this the persons steering the business and affairs of the organisation are expected to maintain a balance between maximising profitability and accountability, and between increasing business operations and philosophy and moral obligations. In this regard the introduction of the concept of ESG is a big step towards ensuring that the parallel intent of organisations towards increasing social well-being do not get derailed or side-lined, rather they remain in focus. #corporatemoralresponsibility #ESG #corporatesocialresponsibility #moralobligation #corporatemorality #moralobligationsofbusiness

The question is not of money, not fame, not anything more or less lucrative, it is about having and maintaining self respect, being able to look at the mirror and smile, of ethics, of professionalism. Introduction Plagiarism is defined as an act of attempting to pass off the work of another person as one’s own work. It is a type of theft of intellectual property that is quite prevalent in educational institutions. However, such offences are also rampant in workplaces. It is an offense with wide implications and long-lasting effects. By committing plagiarism, individuals bring themselves under personal risk. They might be subjected to penalties in case a lawsuit is brought against them. Apart from this, it is also a loss of goodwill and reputation and trust. Plagiarism may take place in different ways. The most detestable way of plagiarizing is to directly take parts or lines of already published work of somebody else without giving the reference to the original writing. This amounts to passing off another’s work as someone’s own and is a serious wrong. Giving an acknowledgement to the original writer is the minimum that a writer can do without demeaning themselves and without hurting anybody else’s sentiments while at the same time being legally correct. Copying someone else’s words is often intentional, but it is not necessarily always so. Sometimes it may just be accidental, when someone forgets to acknowledged the source of the information. It definitely is a kind of stealing, that of words, ideas, sources, an intellectual theft. But in all cases, it can have far-reaching consequences. So, it is important for all of us, whether academicians, authors, professionals, or just students, to try and avoid committing plagiarism. In this article, I have not got into the depth of legalities of plagiarism, as regulated by the Copyrights Act, 1957, but dwelt more on the ethics and morality of the same. My intention is to appeal to professionals to contribute original thoughts and writings that will go a long way to develop the literature in a particular professional area. Types of plagiarism Knowing about the different types of plagiarism is a great way to prevent it, at least the unintentional version of it. The following are some types of plagiarism: Ghostwriting Plagiarism: The most dangerous (read criminal) type of plagiarism is when one just puts their name to someone else's original work. Also called ‘plagiarism of authorship’, here another’s work is passed off as their own by the alleged plagiarizer. Copy-Paste Plagiarism: This type of plagiarism is very common and takes place when a writer simply picks up one or more sentences/paragraph ‘as it is’ from a certain source, uses them without quotations marks and does not provide any reference to the source. Photocopy Plagiarism: This type of plagiarism takes place when one writer copies a substantial part of another person’s work, whether published or not, without any changes or use of their own inputs or opinions. Paraphrasing plagiarism: This type of plagiarism takes place when someone changes words in an existing work by some other words. The writer ideally looks for synonyms for keywords used in the original work and rephrases certain sentences. But in such cases the end product is not quite different from the original. It is also often called word-switch or patch-work plagiarism. Disguised Plagiarism: Sometimes the writer borrows from other sources, and changes the keywords and sentences here and there. The patchwork is disguised as an original one, but the essence of the work remains the same as the source. Idea Plagiarism: Plagiarism is not always with respect to words or phrases; one may be accused of idea theft also. When a writer picks up a creative idea from another work and does not provide necessary credit to it, such plagiarism would be called idea plagiarism. Secondary plagiarism: This type of plagiarism takes place when a writer picks up a sentence with seemingly necessary reference to the original work from a secondary source and uses the same without bothering to look up the original source to confirm what it actually mentions. Self-Plagiarism: When a particular work of the writer is already published and copyrighted by the publisher, borrowing from that source, even though their own, may result in plagiarism and violation of agreements entered into while publishing the original work. In other words, self-plagiarism is like ‘Old wine in a new bottle’. Such plagiarism also takes place when the writer submits the same article for publication at two different places simultaneously and both are accepted. Direct vs. Accidental Plagiarism: The former is a word-for-word copying of another person’s original work that the writer produces without any quotation marks or reference to source. On the other hand, plagiarism can take place accidentally when the writer forgets to provide reference to the original source, or unintentionally provides misinformation. Other types of plagiarism: Sometimes authors properly mention the original author’s name, when citing a study, work or idea, but miss out on putting the original quote within quotation marks. This also amounts to plagiarism. Similarly, citing the original author and source without sufficient information about where to find that work, also amounts to plagiarism as the author is ultimately indirectly passing the work off as his own. Similar type of plagiarism takes place when the author provides inaccurate, misleading information about the source. Ghostwriting: the ethics of it Ghostwriting is common and almost an accepted practice in public speeches or social media posts by celebrities or political leaders. Honorary authorship is another type of ghostwriting that is quite common in the institutional level. This takes place when a person holding a senior position is named as the author although the actual work was done by someone else or a department headed by the former. Such practice is also common in scientific research. The actual writers receive no or little credit but this is often done with their knowledge and implied consent. Another place where ghostwriting is prevalent is in popular Talk Shows that are often scripted in advance, with little to no credit of the on-screen host. Also, books by famous persons are often actually ghostwritten (and there are writers who willingly take up this as a career). Ghostwriting is also the accepted way in bureaucratic documentation. The last one is a very large subject in itself and needs a separate research or deliberation, and I choose to avoid it in toto in this article. In cases of ghostwriting with the consent of the actual writer (mostly contractual in nature) plagiarism often become morally acceptable. The original writers often see this as strengthening their own resumes. (We will not go to the debate of the extent to which the financial constraints of the original writer led him to agree to enter into the contract in the first place or the power and influence that was exerted on them or whether his consent was at all voluntary.) Legal Plagiarism This is one of the biggest areas in which plagiarism is rampant. Legal plagiarism is especially a very big menace in India and only shows the lack of appropriate legal research caliber in our country. This largely points fingers at our legal education system and the need to strengthen it. Why plagiarism should be avoided? Plagiarism is unethical, and in essence, it is a kind of theft of intellectual property. The beneficiary of such theft is the plagiarizer and not the original writer. By passing off someone else’s work as one’s own, the latter also deceives the readers of such work. Further plagiarizers can often get caught in legal battles over copyright and end up paying huge penalties. This also leads to huge loss of reputation of the plagiarizer. By plagiarizing, a person not only deprives the original author the due credit for their work, they themselves often become lazy and thus deny themselves the opportunity to learn and produce work based on their own work and thinking. In short, they deprive themselves of the opportunity to become an original and continue to remain a copy. Plagiarism detection Manual detection of plagiarism can be very difficult. Internet has, however, made such detection very easy. Today there are various softwares, some even available free of cost online, that are capable of detecting plagiarism. Such softwares can look for plagiarism in an uploaded document by comparing it with thousands of other published works. And in a matter of seconds the results may be seen; the matching texts are highlighted and link of the original sources are provided. However, often the original sources detected by the plagiarism detectors are also plagiarized works. But it definitely helps to understand whether the work in question, for which plagiarism is being checked, is plagiarized. It is immaterial whether or not it was plagiarized from a secondary source. Concluding remarks We often indulge in writing as it helps us increase the reach of our work. But there is a very thin line that demarcates the border between research and plagiarism. In this age of widespread internet access, while publishing a work is relatively easy and the reach of published works are faster, plagiarism is also all the more rampant. As an academician or professional who is publishing a work/article, it is important to be ethical and honest. There is nothing wrong in being inspired by someone else’s work, or publishing a follow-up research document of the former, but the same should be clearly mentioned through appropriate citing, references, acknowledgement and quotation marks wherever necessary. In fact, the more the literature in a particular discipline the faster is its development. So, it is always a great idea to contribute largely to a discipline by writing frequently and investing in follow-up research works. All we need is appropriate acknowledgement of the original writer, thinker or researcher.

Compliance involves cost, and hence, it has always been regarded as a Cost Centre. However, I have always had a different opinion. As a prolific writer, I have had a desire to address this issue for more than a decade now. I am happy to be able to do it finally. I hope the following paragraphs on the captioned subject will be self-explanatory. What Is Compliance Cost? Compliance cost includes all the expenses an organisation or entity incurs in order to comply with all the regulations applicable to the industry it belongs to. In a broader sense it would also include salaries of employees assigned the task of compliance, the cost of time spent on complying and the money spent in preparing various reports, new software systems introduced to make the compliance work faster and so on. The common areas of compliance for companies in all industries include company law compliances and regulatory filings, CSR (where applicable), environmental compliances, human resources and labour law compliances, mandatory health and safety compliances, various types of audits, adhering to various applicable standards (e.g. auditing standards, accounting standards, secretarial standards, etc), various types of taxes and so on. Compliance cost rises as regulatory requirements in an industry increases. These regulations may be local, national as well as international in nature. Some apply to all industries, some are based on market capitalisation of the company while others are sector specific. Certain others are applicable based on the financial results of a company. So as the organisation increases its reach to various geographical jurisdictions globally, its compliance cost also increases. Compliance Cost vs. Regulatory Risk Cost vs. Conduct Cost Compliance cost is not the same thing as regulatory risk or conduct cost. Regulatory Risk Cost is the cost associated with the risk that companies face due to potential change in the existing regulations in future. Conduct costs are the costs a company incurs for breaking the extant regulations. Rising compliance cost Compliance costs for companies globally have been rising as regulatory requirements are becoming more stringent. With the advent of the concept of corporate governance, the ‘stakeholders’ view replaced the traditional ‘shareholder’ view that was much narrower in approach, and entailed much lesser compliance cost. There are other factors also that have resulted in increase in compliance cost of companies. Some such factors are globalisation of business, modernisation, increased awareness about environmental pollution and climate change, increased acceptance of social responsibility, requirement of fraud detection and reporting, data privacy measures and so on. New regulations, like those against money laundering, deceptive advertisements and marketing, anti-competitive business, violation of consumer protection laws, prevention of sexual harassment etc., are being continuously introduced, thus adding to the compliance cost. Further, as a company grows, although it benefits from ‘economies of scale’ even with regard to compliance costs, certain costs like those associated with access to the capital market and the resultant compliance cost increases. Cost of Non-Compliance Although cost for compliance has been on the rise globally, a number of studies have revealed that it is even more costly not to comply with regulations. In others words, the cost of non-compliance is always higher than the cost of compliance. A study shows that the former is 2.7 times the latter. To put it simply, a company that avoids or fails to pay the compliance cost in time ends up paying a minimum of 2.7 times the amount of default as non-compliance cost. Thus, in a country like India, failing to meet regulatory compliance requirements in prescribed time and manner costs companies some thousands crore rupees. The staggering amount is because of the fact that costs of non-compliance actually go far beyond simple fines. As they say, the fine a company pays for non-compliance, is only the tip of an iceberg. The actual financial burden of non-compliance would also include other hidden costs. Based on the severity of the non-compliance, one or more of the following costs may also be incurred: - Cost of time and paperwork in replying to show cause notices - Cost of disruption in business - Cost of loss in reputation of the company - Cost of loss of stakeholder’s trust - Cost of loss of productivity - Cost incurred in inspection and investigation - Cost of products that have been seized from market due to con-compliance - Cost of injunctions - Cost of resultant litigation - Cost of compensation - Cost of compounding of offences The above costs form part of cost of non-compliance and are over and above cost of fines, penalties and other fees. Further, repeated non-compliance may result in long term loss of reputation that may even harm the branding of a company, resulting in permanent threat to business. Certain things like customer trust, goodwill, brand image etc. once lost are difficult to win back. Avoiding Cost of Non-Compliance The cost of maintaining compliance is thus much lesser, and impliedly easier to manage, than the cost of dealing with non-compliances. By creating a robust compliance structure and having a good compliance team an organizations can not only avoid fines and penalty but also ensure that there is no reputation damage, slowdown in production and avoidable litigation in future. As they say, “Prevention is better than cure”, the best approach for all organisations to avoid high costs of non-compliance is to have a robust compliance planning and compliance officials. Ineffective Compliance is as bad as Non-Compliance If compliance is not done in time, and in the manner required, it is as bad as non-compliance. Hence, in this article, whenever we talk of compliance cost, we mean efficient and timely compliance cost only. Compliance Cost as a Profit Centre Compliance has always been treated as a Cost Centre. Ensuring high levels of compliance indeed involves some costs. It must be treated as a Profit Centre as, although not directly, but indirectly it does add to a company's bottom line profitability. A proper compliance management system in an organisation ensure the benefits of better efficiency, that leads to higher productivity, lowers chances of process and system failures, lower deviations from standards that reduces rejections, and the consequent cost of rework, enhances reputation leading to better market share and resultant increased revenue. Need for more compliance professionals With increased dedication to avoiding non-compliance, an organisation would ideally require more compliance personnel, in the senior, middle and junior levels. Initially this would seem to increase the cost of compliance, but in the long run, this actually reduces the cost of non-compliance, which is multiple times the cost of compliance incurred. Larger organizations have double the benefit resulting out of economies of scale.

In this age of growing conversation about sustainability and ESG, terms that are making inroads to corporate jargon and increasingly becoming popular around the world are ‘net zero’, ‘carbon neutrality', ‘climate positive’ and so on. Corporate citizens are becoming increasingly aware of their responsibility towards protecting the environment and ensuring sustainability. Often the two terms, ‘carbon neutral’ and ‘net zero’, are used interchangeably, although they do not necessarily mean the same and identical thing. In an era when corporates and professionals are beginning to understand the implications of ESG, sustainability goals, climate change etc. it is pertinent to use the right words in the right place. So, in this article we will talk about these terms and the distinctions between them. In the wake of increased awareness about #ESG reporting, corporations often express their desire (and/or plan) of becoming carbon neutral. This means they intend to remove the equivalent amount of harmful gases emitted to the atmosphere by them. They essentially start the process by cutting down their CO2 emissions to the extent possible first, and top it up by investing in carbon offsetting or carbon mitigation programmes. This is done essentially by investing in ‘carbon sinks’ which mean forests, oceans or other natural environments that are capable of absorbing equal, if not more, carbon from the atmosphere than they emit. Carbon sinks help organisations to offset or balance out their emissions and thereby allow them to maintain a clean corporate conscience. Carbon neutral vs Net zero vs. Climate Positive It is very important to understand the difference between the three terms. Let us look at their definitions first: Carbon Neutral Carbon neutrality means having a balance between emitting carbon and absorbing carbon from the atmosphere. In other words, it means that the sum of carbon any corporation puts into and absorbs from the atmosphere comes to zero. This is done through a combination of efficiency measures that reduce in-house emission and carbon offsetting programmes. Net Zero Net zero on the other hand, implies that the sum total of the amount of a combination of greenhouse gases or GHGs, that include carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), sulphur dioxide (SO2) and other hydrofluorocarbons that is emitted by the corporation’s activity and the amount removed by it from the atmosphere is zero. In other words, an equivalent amount of GHGs emitted by it is removed by it from the atmosphere. This implies that net zero is similar in concept to carbon neutrality, but is larger in scale. Climate positive It is a concept with a much larger implication. It means an attempt at achieving beyond net-zero carbon emissions by removing greenhouse gases beyond what has been released into the atmosphere. Summing up Summarizing our discussion above, we can see that both the concepts of net zero and carbon neutrality have the same objective, which is to remove harmful emissions from the atmosphere, but the scale and kind of emissions removed are different. And achieving a ‘climate positive’ world is the most ideal situation, although, practically not necessarily the most achievable one. A ‘Net Zero’ world Attempts to achieve a net zero world are being taken up across the world, and is a cause for concern for world leaders and features on national agendas. To achieve this, the efforts of governments alone will not suffice, organisations as well as individuals must come together. An organisation targeting at ‘Net Zero’ is ultimately attempting to benefit all its stakeholders. In order to do so, corporations must measure, track and control their GHG emissions through a process called carbon accounting. Some activities that are intended towards achieving this ideal are reducing wastage of electricity, recycling water, avoiding food waste, promoting car pool services amongst employees across all levels, recycling packaging material, reducing use of paper and avoiding wastage of stationery and so on. Not just corporations, as individuals, we also have a role to play towards ensuring a net zero world. We must also adopt a sustainable lifestyle and reduce our carbon footprints to ensure minimum negative impact on the environmental.