Corporate leaders in India have been watching the new Companies Bill’s passage through the houses of parliament closely. The bill mandates at least one woman on the board of a certain class of companies — to be determined by the rules that are being framed potentially based on market cap. While there are murmurings of quotas, in reality, this is a progressive step that continues the move to increased discipline in governance and an innovation orientation. Apart from the famous McKinsey study of 2007, multiple studies in diverse countries have made the case for women on boards. For example, the 2011 study of Dutch companies by M Luckerath-Rovers of Nyenrode University, showed that companies with female directors performed better, financially, than those that did not. The research argues that besides governance roles, Boards are a critical linkage mechanism to the broader environment, and to that extent diversity is important for all four linking features they establish –understanding otherwise illusive information, communicating to the environment, getting commitments of support from key external stakeholders and legitimising in the eyes of partners and current/future employees. This last feature is a critical one in the Indian context, where firms struggle with the retention of key talent. Also, consider this. A recent study by Booz & Company estimates that if Indian women could achieve employment rates equal to men, the country’s GDP would increase by 27 percent. In addition, emerging research from the Center for Talent Innovation has strongly correlated diverse boards and diverse leadership with innovation and growth in marketshare. The research will be public in September, but we’re talking double digit deltas when compared with companies with non-diverse leadership. India has 5% of boards having women representatives, as against China at 8%, the US at 15% and Norway at 35%. The research from the Center for Talent Innovation has shown that there has been a significant Off Ramp issue as women drop out at mid-management levels due to a combination of pull factors (societal expectations, the pressure to be the care provider to children and to parents, the lack of infrastructure for childcare and education, etc.) and push factors – unfriendly work environments play a significant role: 72% of Indianwomen professionals leave because their careers are not satisfying or enjoyable; 66% leave because they feel their career progression is stalled. The good news: An overwhelming 91% of Indian women want to return to work, similar to the US (89%) and significantly more than Germany (78%). However, there’s bad news for employers: 72% do not want to return to their former employer. There is a stereotype of success – for example, 73% of women at multinational companies and 55% at Indian companies say they need to compromise their authenticity to conform to their company’s standards of executive presence. Hence, such an initiative can have a significant directional impact. Larry Senn first wrote about the Shadow of the Leader in 1970. It gestures at the reality of how leaders through their likes, dislikes, treatment of subordinates, language and idioms, beliefs and values tends to shape thecharacteristics, culture and ways of doing business in the organisation. When you have a highly male leadership, norms emerge that tacitly exclude – think of the “let’s do business over a round of golf” or “over a drink” and you’ll get the picture of how excluded an average Indian woman leader might be. A cautionary word – there is much written about how difficult it can be for a single representative of a minority (be it a woman, minority, young leader or a different capability like a non-engineer in a group of engineers) to be heard. I will watch this space closely to see how the first generation of brave business leaders fare, as they make inroads into large promoter and family-controlled boards and boards that have never had a tradition of engagement with diversity.
You are free to give someone a piece of your mind while at home. However, when it comes to your workplace, better mind your words because even an off-the-cuff remark of yours can not only spoil your relationship with your boss or coworkers, but can also sometimes put you in trouble.
“In today’s day and age, undoubtedly we spend most of our time at work. However, it does not mean that we keep our guards down and say whatever comes to mind. In fact, most organisations work on the philosophy that words are the best representatives of a person’s personality. Therefore, we should always avoid saying something which can put us in a bad light at our workplace,” says Deepak Kaistha, managing partner, Planman Consulting.
Here’s a list of things you must avoid saying at work:
Everyone gets approached to do things that are not part of their defined role. If someone asks you to help him out, consider it a testimony to your capabilities.
“Unless you are completely getting off focus, going beyond the etched boundaries of your role will only earn you good merit with your boss and colleagues,” says Ashish Arora, founder & MD, HR Anexi.
No need to explain, therefore, why you should always avoid saying things like, “This isn’t my job!”
2. “It’s not my fault”
Sure, it is not. But saying it this way makes you seem more narrow minded and less of a team player. Call it an ‘issue’ instead of a ‘fault’. Rather than saying you were not responsible for it, point out what you believe caused it.
Then, not only does it become obvious that you were not responsible for it, but it shifts everyone’s attention to the root cause of the issue and what needs to be done to resolve it.
“In the fast-paced culture of corporates, there is no space for slackers. If you did something that created a negative impact, have the courage to except your fault instead of putting the blame to someone. Bosses usually like people who take full ownership for a deed done,” informs Udit Mittal, founder & MD, Unison International.
3. “I’ll try”
You certainly will, but it is better not to say just that when you are accepting the task. If you are unsure of whether you will be successful, say instead, “Thank you. I’ll let you know how this goes.”
“Saying ‘I’ll try’ can also mentally limit you somewhere from giving the work your best shot. If you say something more positive and specific, it creates a better impression of your efforts with the listener. Then, even if you fail despite your best efforts, the person will appreciate that you actually did try,” says Arora.
4. “There’s nothing else I can do”
If you are saying this after trying everything for success, it could still sound reasonable. But if you are giving up even before trying, or somewhere mid course, it makes you seem less committed and enthusiastic.
“If, after trying everything, you really do believe that you cannot do anything more, it might be better to say, ‘I’ve tried all of these options, but we’re still not making it because of this (reason). Please suggest what else I can do to resolve this issue’,” says Arora.
5. “That’s impossible”
There’s nothing impossible when you have your heart and mind to it.
“Saying that’s impossible shows that you are ruling out any way of doing a thing, and if your boss thinks there is a way to do it, there probably is. You just need to change your way of looking at it,” says Mittal.
6. “That is so unfair”
Do not play the victim. If you feel something is not fair – and it is not in quite a few cases in the workplace – explain why it is the wrong approach. “Turn your emotions into conviction, not complaint. Reason with people and bring them to see your point of view,” says Arora.
Also, if your colleague, for instance, gets a raise and you don’t, if he gets recognition and you don’t, never say it’s not fair or that’s unacceptable. “It shows a huge negative impact on your behavior and attitude and makes you look like a person who always cribs,” explains Mittal.
7. “I told you so”
Your worry may have come true, but it will not help to keep reminding the sufferer so. Instead of adding to the person’s distress, offer to help to clear the mess. You never know who you might need in the future.
You will be doing this person a genuine favour, and in return, he will always be grateful to you.
8. “I did the same thing he did, why am I wrong?”
This is a common mistake people do. The reason why you are hired is because you are different.
If you are doing the same thing someone else does, that person could have easily done what you are doing and you would not hired at all.
9. “Please listen to me!”
If you have to beg others to listen to you, it may seem like you have nothing important to say.
Cut through the noise with a compelling statement, like, “I have a different proposition.” or “I know just why this won’t work.” Within a few moments, your message will sink in – the noise will stop, and people will straighten up and listen to you.
10. “I’m quitting this company right now!”
Whether or not you mean it, giving your manager or others this ultimatum will never lead to any real glory for you. At best, others may perceive that you are very frustrated with your environment, and do not know how else to deal with it than by threatening to quit.
“At worst, you may be taken seriously, and this reckless comment may speed your way out of the organization before you truly want it,” says Arora.
Source :The Economic Times
Writer: Sanjeev Sinha,
A host of recalls by auto companies and legal action against Indian pharma companies overseas has made insurers tread with caution. Insurance companies are having concerns over selling product liability to the two sectors.
A leading pharma company which had a product liability cover of Rs 25 crore is understood to have used up the entire amount in legal charges in respect of a product liability claim. In the auto sector, General Motors had recalled 1.14 lakh Tavera multi-purpose vehicles and Yamaha had recalled 56,000 Ray scooters after detecting manufacturing defects. Insurers have been selling product liability cover up to $20 million (Rs 120 crore) and recall covers ranging from $3 million (Rs 18 crore) to $5 million (Rs 30 crore).
“Insurers have always been cautious about auto and pharma when it comes to product liability. Recent incidents will add to their concerns,” said G Srinivasan, chairman, New India Assurance. Product liability insurance is a popular cover among manufacturers to protect themselves against legal claim for damages for any deficiency in their products. The ‘product recall’ cover is an add-on to the product liability policy and is purchased largely by auto and auto component manufacturers. “We have had recall claims, but none of the recent events are covered by us,” said Srinivasan.
T A Ramalingam, head, underwriting, Bajaj Allianz General Insurance, said, “The insurance industry sees product recall as a loss minimization measure aimed at reducing a bigger loss arising out of product liability. In the cover we offer, there has to be material damage or loss of life caused by manufacturing defect for the claim to be triggered.”
There are, however, international policies which cover proactive recalls but the underwriting procedure is very stringent and insurers go through all the quality control processes followed by the company before issuing the cover. Insurers believe that GeM India has a product cover as part of an international ‘umbrella cover’ which covers operations across geographies.
What makes the recall cover expensive is the total cost of the process. In most cases, the process ends up being more expensive than the spare part itself. Besides arranging for transportation of the vehicle, workshop costs and costs of spares, there is the cost of publicity. Some of the international policies, besides covering the cost of media announcements, also cover the cost of hiring public relations firms to reduce the reputation damage.
In the case of pharma companies, product liabilities are expensive because of the huge penalties and fines imposed by the government. Earlier this year, Ranbaxy paid close to $500 million in penalties to US regulators to settle a case of substandard manufacturing practices and falsifying data.
Source :The Times of India.
Date : 06/08/2013
Writer: Mayur Shetty TNN
It isn’t intended to crush young dreams. But for over a million engineering students who are stepping into placement season this month, Nasscom President Som Mittal’s confirmation that IT hiring will indeed decline 22% to 1.8 lakh this year does just that. “Ten years ago, we could hire half the graduating engineering students, but now, there is global uncertainty, automation, nonlinear growth,” Mittal told ET even as a new engineering placement season gets underway in a rather bleak economic backdrop. “We cannot provide jobs to all.” As it is, a fifth to a third of engineering graduates run the risk of being unemployed. Many others will take jobs well below their technical qualifications, an ET special feature had reported recently. That’s the environment in which hundreds of non-IIT and second-tier colleges are now getting into a placement overdrive. They are roping in newer industries, inviting more companies, settling for salaries that are much lower than the minimum benchmarks, and encouraging more students to entrepreneurship. “Last year, we had a placement record of 85%, but this time, we would be happy even if we meet 70% of the target,” says Guru Venkatesh, V-P (placement and corporate relations) for Dayananda Sagar Institutions. “Up until 2012, there were companies we would not touch…but this year, we are looking at all.” But top-rung institutes, including the Indian Institutes of Technology, remain relatively insulated. “We have no worries. Only 15% of our students join the IT sector and for our 1,200-odd students (all streams included), salaries are expected to go up as well,” said an official from the placement office of IIT-Madras. The average salary has gone up from . 8.9 lakh for the batch of 2012 to . 11.4 lakh for the class of 2013.Cos to Share Slots from Day 1
Karnataka-based Dayananda Sagar Institutions has around a 1,000 students to place. This year, it has decided that companies will have to share slots from day one. Three companies will be allowed to pick students on the same day; only one was allowed earlier.
“IT companies, which used to be the large recruiters, will hire fewer people, so we are trying to get more firms to make up for the numbers,” says Venkatesh. “In 2012, around 100 companies came. This time, we will try for 200, which includes startups,” he adds.
CALL THEM ALL
Colleges are compromising on salaries too. “Last year, we had few companies offering Rs 3-lakh plus salaries. This year, we are open to more companies with salaries of Rs 3 lakh or so,” says an official from the placement team of Tamil Nadu-based VIT University. The campus has started its placements with companies like DE Shaw, Flipkart and Ebay. IT companies, which constitute about 70% of hires, usually come later in the year, around September onwards.
Campus placements for engineering colleges start from mid-July and continue for the next eight months. Initially, those from core engineering industries, R&D, and sectors like auto, manufacturing take their pick. The IT mammoths, which hire in large numbers, come only in September but have said their hiring will be muted. “The overall industry will see muted hiring from campus this year,” says Pratik Kumar, executive vice-president for human resources at Wipro.
Compared with 2,30,000 IT jobs created in 2012, only 1,80,000 will be generated this year, according to Nasscom. This year, IT giants will hire in September during campus placements and again in May-June, to bulk up their off-campus placements, Mittal adds.
Bangalore-based RV College of Engineering is advocating entrepreneurship for its students. It is looking to garner Rs 25 crore in two years for its entrepreneurship cell. In the past 50 years, 12% of its alumni became entrepreneurs and the college hopes more will follow suit. It wants the 1,000-odd engineers graduating every year to apply for more patents and research projects so that they are picked up by core engineering firms and do not have to bank upon just the IT sector.
Delhi Technological University (DTU) will follow a similar strategy. “We have added 15% new recruiters only for computer science and IT students, keeping in mind that hiring numbers per company may take a hit,” says Neeraj Nimwal, training & placement officer for DTU. Says Nasscom’s Mittal, “Colleges need to look at other sectors like manufacturing, pharma, biotech as recruiters. In fact, I am more worried about those graduating four years later.”
Some have done so without delay.
Bengal Engineering and Science University (BESU) has around 500 students, roughly 180 are from streams like IT, computer science, electronics and electrical engineering. MK Sanyal, professor & head, department of HR Management, says placing all these students is getting more challenging as the scenario gets increasingly competitive. Earlier, if 30 companies used to approach the institute for placements, the first 5-6 would absorb all the students, and the others had to be sent back. “Last year, we felt the heat when several more companies were required to take on all the students. This year, we will have to accommodate even more companies,” he says.
Source: The Economic Times
Written by: DEVINA SENGUPTA & SREERADHA D BASU
The long-pending legislation to raise the FDI limit in insurance could finally be cleared by Parliament after the principal opposition party, BJP, proposed capping voting rights at 26% in return for allowing foreign investors to hold an overall 49% stake.
On Saturday, Finance Minister P Chidambaram met BJP leaders — Sushma Swaraj, Arun Jaitley and Yashwant Sinha — to discuss the long delayed insurance and pension bills. Sources familiar with the matter said the finance minister told the BJP interlocutors that he would discuss the proposal to cap voting rights at 26% with the PM. “There should be some forward movement,” said a BJP leader. A senior finance ministry official familiar with the government’s thinking confirmed that the idea of capping voting rights at 26% had been put forward by the BJP leaders during Saturday’s meeting. He declined to discuss the government’s formal response.
While there have been no major differences between the two sides over the pension bill after the government agreed to explicitly stipulate a 26% cap on FDI in the legislation, BJP has so far been resisting increasing the quantum of FDI in the insurance sector to 49%. At the meeting, Sinha, the former finance minister, during whose tenure insurance was opened up to private investment in 2002, is learnt to have suggested the cap on voting rights. Sinha argued such a cap is in line with the banking companies’ amendment bill passed by Parliament, in which the voting rights for foreign investors in private banks is capped at 26%.
There is agreement between the two sides that the country needed large inward flows of foreign capital to overcome the present crisis in which the rupee has been plumbing to new depths. BJP’s support is crucial for the government for the passage of the two bills, which have been pending for around a decade. If BJP joins the Left in opposing the legislations, the government will find it difficult to ensure their passage in the Upper House. During UPA-I, the Left’s resistance had put both the bills on the backburner. An attempt to pass the Pension Regulatory and Development Authority Bill last year failed when Mamata Banerjee’s Trinamool Congress, UPA ally at that time, opposed it.
Source: The Economic Times
Aviva, the UK life insurer whose products are promoted by star cricketer Sachin Tendulkar, plans to sell its stake in Indian joint venture with Dabur’s founding family, the Burmans. The stake may be valued at around $250 million. The 26% stake of the insurer looking to cut costs globally, may be sold either to another global insurer, or to the Burmans themselves who could re-sell it at a later stage to an international company which could bring expertise to run the business, said two people familiar with the matter.
“Globally, Aviva is looking at alternatives but they have not formally informed us of any such development,” said Mohit Burman, director, Dabur Group. “We will look at all alternatives when the time comes. If the Insurance Bill is passed in Parliament, there will be companies willing to buy 49% in Indian companies.”
Aviva joins a rising list of international insurers who are quitting India either because of their troubles at home markets, or due to frustration because of not allowing them to raise their holding beyond 26%. ING has sold its stake in a joint venture back to battery maker Exide, and New York Life sold as well. HSBC is looking for a buyer of its stake in the insurance venture.
“Aviva does not comment on any market rumours or speculation,” said Aviva India MD and CEO TR Ramachandran in an email response. The UK company has been a laggard in the Indian insurance industry, slipping to the 13th rank with new business premium income falling 14% last fiscal, from . 799 crore a year earlier. The London office of Deutsche Bank and JP Morgan may be mandated for the sale, said those people who did not want to be identified. This could not be independently verified.
More than a decade after private insurers were allowed to end the state-run Life Insurance Corporation’s monopoly, the industry growth has slowed down due to various regulatory issues.
The Insurance Regulatory & Development Authority (Irda) clamped down on the product design and enhanced policyholders’ protection that slowed sales and raised costs. The industry shrank last fiscal 6.32%.
Slowing growth also triggered the exits of other international companies which were also unhappy with the government unable to legislate allowing them to raise holding to at least 49%.
Aviva may be the third global company to exit Indian market. In April 2012, New York Life sold its 26% stake in Max India for . 2,000 crore, valuing the company at 3.5 times embedded value-the present value of future profits. ING sold its stake in ING Vysya Life Insurance to Exide Industries for . 550 crore January 2013.
But there have been new entrants too in this market where less than 30% of the population has insurance cover. Japan’s Nippon Life bought 26% in Reliance Life for . 2,948 crore at three times embedded value in March 2012.
Source: The Economic Times
Stung by sluggish growth, life insurers from Reliance Life to Aviva are assuring returns far higher than market average which could burn a hole in their finances and raise the risk of unfulfilled promises if yields remain low for long.
With individuals clamping down on insurance purchases because of price rise eating up a higher share of income, companies such as HDFC Life and Aviva are focusing on group businesses where they say they would pay higher returns on gratuity funds invested with them.
Recently HDFC Life offered 10% returns to Punjab National Bank to manage a . 20-crore group gratuity scheme, said two people familiar with the offer who did not want to be identified. Aviva offered 10.2% to Central Bank of India to get a . 30-crore corpus. Reliance Life is offering 10.25% to get group business, said those people.
The yield on benchmark government bonds, the securities in which insurers have to invest at least half their corpus, are yielding 8.15%. Indeed, the yields were as low as 7.2% in June. Although, falling yields boost to value of bonds, a prolonged period of low interest rates may make insurance companies go back on their assurances, or dip into their corpus.
HDFC Life, Reliance and Aviva declined to comment for the story.
“In case anybody is doing it to shore up the topline, it is bad for the business, industry and not sustainable,” said Kshitij Jain, managing director and CEO, ING Life Insurance Company. Life insurers are driven to these strategies as overall business has been slowing after a boom in the so called unit linked insurance policies or Ulips, a kind of mutual fund scheme that was restricted by the regulator.
As per the norms, group plans follow regulated investment policy where 50% goes into government securities, 15% into equity and another 35% in corporate bonds, infrastructure and other instruments. Even the equity markets are languishing. Only a dramatic turnaround and extraordinary performance by stocks could offset the shortfall from fixed income securities.
Every employer buys group gratuity cover, as it is a statutory liability. Companies issue a tender for group scheme, which is on an annual basis. There is an actuarial calculation, which goes into arriving at the liability of an employer based on the number of years of service, age, attrition and number of employees. Group insurance business also includes group superannuation scheme, which is a pension plan for employees after their retirement from active service.
“Companies offering returns of over 10% in group business is suicidal and complete madness,” said V Srinivasan, an independent consultant and former CFO of Bharti AXA Life Insurance. “Group business is loss-making. Companies vie for this business hoping to cross sell to the employees.”
Reliance Life’s group business surged 254% in the June quarter and for Kotak Life it was 179%. Canara HSBC OBC Insurance’s business segment more than doubled. State-run Life Insurance Corp.’s rose 50%.
This is in contrast to the overall industry where new business shrank 1.2% in the June quarter. Individual business for the industry fell 26% during the period.
Source :The Economic Times.
Date : 08/08/2013
Writer: SHILPY SINHA