"I feel Mr. Mistry’s Corporate Governance Initiative is nothing less than a moral imperative.”
San Francisco CA (PRWEB) December 20, 2016
In response to the former Chairman of Tata Sons Cyrus Mistry’s formation of the Corporate Governance Initiative last Friday, Mr. Pelosi stepped forward today with overwhelming support of the undertaking.
Paul Pelosi Jr. has over 15 years of experience advising emerging and Fortune 500 companies in the areas of finance, infrastructure, sustainability and public policy. He advised NASA Ames Research Center, Sunforce Solution International, and the AirPatrol Corporation on a variety of infrastructure projects and has recently been appointed to the advisory board of Oroplata Resources, Inc. as well as spearheading his own initiative Climate 4 Change.
In a statement today about his endorsement of the Corporate Governance Initiative, Mr. Pelosi stated “A movement like this on an international platform was long overdue. In a boardroom takeover in October, we watched as Mr. Cyrus Mistry was removed as Chairman of Tata Sons Limited, the holding company of the Tata Group $103 billion Tata Empire, one of the largest conglomerates in India owning brand names such as Land Rover and Jaguar to include partnerships with Starbucks and other large international companies. The sudden removal of Tata Sons' Chairman by Harvard Business School Dean Nitin Nohira at the request of ex-chairman Ratan Tata has ignited a major blow back behind the main reason for his removal. This is particularly concerning to the public and minority shareholders because the stated explanation for the firing has been inconsistent with Chairman Mistry's favorable annual performance reviews leaving many relevant questions unanswered. The move has cost the company $16 billion in market capitalization (value) since the coup attempt a month and a half ago. This type of corporate cronyism at a cost to the shareholder cannot stand.”
When asked about the situations relationship in regards to proper corporate governance, Mr. Pelosi went on to say, “Many minority shareholders were surprised to find that the Director Nitin Nohira, Dean of Harvard Business School, did not ensure a more thoughtful removal process such as proper corporate procedures for the removal of a director or chairman as set by the bylaws, or avoiding the appearance of a conflict of interest and having a detailed successor plan in place. It has even been suggested that Nitin Nohira's cooperation and support of the instant firing of Mistry may have been influenced by his personal relationship with Ratan Tata and his $50 million donation to Harvard Business School in 2010 coinciding with Nohiras’ appointment. To me, this becomes the key point when ethics and corporate governance reach critical mass. After all, ethics in business means following basic corporate governance rules, especially in times of distress. It does not mean flip-flopping when it suits individuals at the expense of shareholders and stakeholders. When watching events like this unfold in the public forum, I feel Mr. Mistry’s Corporate Governance Initiative is nothing less than a moral imperative.”
Mr. Pelosi then summarized “We all witnessed Nitin Nohira gather the votes to oust a Chairman but did so in an unprecedented and some would deem a questionable way. He added three board members to a body of six, increasing it to nine, only seven weeks before the vote (Imagine a Chief Justice of the US Supreme Court having the ability to add three more judges at his whim in order to change campaign finance laws just weeks before a vote); and then did so at the request of a man who was not even a part of the board at the time, but who was in fact, the ex-chairman, Ratan Tata. Mr. Nohira didn’t even introduce the issue as a subject to vote on in the board meeting.
The removal was clearly inconsistent with the governing business corporate law of India under The Companies Act, 2013, which details the importance of a Director's autonomy to ensure an appointees' ability to effectively perform duties. An act like this requires it be scheduled as an item to discuss and vote on at a board meeting. Ironically, what had been put on the board meeting agenda of October 24th 2016 by Cyrus Mistry was a discussion of the lack of corporate governance and ethics within Tata Sons surrounding several dubious business deals with companies they had bought and contracts they had won. “
Mr. Pelosi further cautioned, “You have to realize over thirty percent of India's publicly traded companies seeking foreign investors are controlled by one family, I call them, the ruling families. As we become a more globally inter-dependent world, it’s critical that these ruling families distinguish between their own personal interest and the interests of the corporation. This requires proper corporate governance.
Unbeknownst to many, Tata Sons is one of the largest employers in the UK and has several publicly traded companies in the US to include numerous consulting contracts with the US government and several financial institutions. Their decisions do not only affect people halfway around the world; with a global giant like Tata Sons, their decisions affect us all.”
Mr. Pelosi concluded his statement saying, “One of the best communications experts in the country Michael Bernoff once told me, “Common sense isn’t always common practice” and when it comes to corporate governance, Cyrus Mistry has identified the challenge and hit the literal nail on the head. It is our responsibility as representatives of the international corporate community to find an ethical balance between the interests of a company's many stakeholders. I believe the Corporate Governance Initiative can be the opening salvo in the pursuit of this outcome.”
About The Corporate Governance Initiative
The Corporate Governance Initiative is committed to assisting organizations adhere to a system of guidelines, practices and procedures by which a company is directed and controlled. The Corporate Governance Initiative will also help companies create policies to find balance between the interests of a company's many stakeholders, such as shareholders, management, patrons, providers, investors, government and the public.