Corporate Governance Takes the Cake

The revelation that at least two Indian outsourcing firms engaged in inappropriate business practices, resulting in their disbarring from the World Bank, has reinforced the need for strong corporate governance practices from public companies. But, that's the least of the outsourcing industry's concerns. Outsourcing is an industry and business model built upon a foundation of confidence and integrity. The act of contracting a third-party to serve as a business partner for certain support functions requires mutual confidence in the business ethics of the parties involved. TPI's governance service offering actually performs many of the governance functions on behalf of our clients providing a mix of onsite, offsite and offshore resources. These resources put the contracting mechanisms in place to preserve clients' ability to manage risks. Recent events are not isolated incidents by the way - rather a recurrence of many similar ones in corporate history; not just in India but across the globe. Regardless of the industry, history has shown that the "tone from the top" sets in motion a ripple effect.  When employees are functioning in a culture of greed and deceit, mischief is not far behind. This is why extending the blemish of recent developments over the entire outsourcing industry is surely taking it too far. Each time these incidents occur, regulators' reactions help to renew vigilance in the industry and strengthen the regulatory code.  These actions; however, often do not achieve the intended goal of preventing recurrence. Greedy people will continue finding ways to beat the system. That's precisely why firms that are transparent and demonstrate solid corporate governance will reign supreme with both a preferred partner status to do business and (you guessed it) a premium on the bourses.