Kathmandu, January 27:

In any organisation, human resource is extremely crucial to boost productivity for which management should be ‘effective’ and play a ‘valuable role’ by adopting a sound performance criteria to boost the morale of employees.

Anil Shah CEO of Nabil Bank said this while presenting a paper on ‘Corporate Governance: The Need of the Hour’ at a programme organised by the Management Association of Nepal (MAN) in collaboration with the World Bank, Public Information Centre (PIC).

At the programme, chaired by Rajan Singh Bhandari, vice-president of MAN, Shah called for a mindset change for sound corporate governance. Shah said that an organisation should be driven by a system and not on the basis of personalities.

Talking about common elements of sound corporate governance, he mentioned about the development of corporate values, codes of conduct and a system to measure compliance with them, corporate strategy against which the performance of an organisation and individuals in it can be measures and a strong control system. He was of the view that poor corporate governance results in loss of stakeholders’ confidence and therefore, in the long run will have negative impact on the institution’s ‘bottom line.’

Similarly, the organisation should have financial and managerial incentives to act in an appropriate manner in the form of compensation, promotion and other recognitions, said Shah.

Shah said that to improve corporate governance in the organisation, certain committees needed to be set up such as audit committee, performance monitoring committee, compensation or HR committee, risk management committee and corporate governance committee.

He said that members of senior management, who oversee day-to-day management of an organisation, must have the necessary skills to manage business under their supervision. He said that ineffective control over the activities of apparent ‘star’ employees due to over-confidence causes big failures. Over 30 experts from various sectors took part in the programme.