Strengthening Governance in a Technology Driven World | CS Aditya Purohit

Strengthening Governance in a Technology Driven World | CS Aditya Purohit

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Hello everyone and welcome. I am Deepak from Dess Digital. At Dess we work with boards, leadership teams and governance professionals to help make governance processes more organized, collaborative and efficient through technology. Today I am delighted to be joined by Mr. Purohit. Mr. Purohit is currently the Company Secretary and Compliance Officer at Tag Girl Railway Systems Limited and brings over 12 years of experience in corporate governance. Over the course of his career he has worked extensively with listed companies and has been involved in governance and regulatory matters relating to more than 200 listed entities. His experience gives a unique perspective on how organizations prepare for important leadership discussions, manage compliance responsibilities and navigate an increasingly complex business environment. Beyond his corporate role he has also contributed to the profession through his association with the Institute of Company Secretaries of India including serving as the Chairman of the Hugli Chapter. He is also a strong advocate for responsible and sustainable governance practices. We are delighted to have him with us today to discuss how governance is evolving, the growing role of technology and what organizations can do to build stronger governance frameworks for the future. Welcome Mr. Purohit. It's great to have you with us.

Thank you Deepak. Thank you for inviting me over here. Thank you.

Pleasure is all ours. So let's start by talking about how governance has changed over the years. With your years of experience in corporate governance, what are some of the biggest changes that you have seen sir?

Before starting I would say the role of company secretaries has itself evolved and then comes governance. We as company secretaries have now become more of a governance professional. Earlier we used to be seen as back office staff. Now with the governance structure of corporates being regulated to such an extent, it is the utmost need of the hour that a company secretary should be looking into governance rather than being seen as a back office person. With this change we have become a strategic pillar in business growth, business success and overall organizational value.

I represent the whole community from my personal experience — we have been one of the major contributors to governance. The reason being the government is looking at us to be the face of the organization. I believe in one particular philosophy: compliance is something which protects an organization but if you want to grow you have to have the governance structure because the governance structure of an organization empowers it to the next level. Today investors, the government, stakeholders — everybody is looking at how the company is actually working on its governance structure. We have seen major collapses happening — a big case just a few days back which I would not be naming here but we all know what happened. We can understand the role of a governance professional right now — it's not merely doing board meetings and filings, it's now becoming a part of the business. The more transparent we are, the better the organizational value and value creation.

Earlier what used to happen was that we were only a part of the board — doing the board meeting, filing the forms. Now that is still there. But the larger picture is that we are a part of the value creation chain. The promoters, the society, the stakeholders look at us as professionals, as custodians who are facilitators to strategic decision making. We are not merely back office staff. Now we are a facilitator, a positive catalyst to the governance structure, to the transparent structure, to the value creation of the company. It has changed globally also — lot of changes are happening. ESG is coming up, succession planning is there. We are the torchbearer to the promoters, to the society, to the corporates. We have to make them understand how things are going to be looked at in a prospective manner. Earlier it was more retrospective. Now we have to plan the governance structure of a company as per stakeholder expectations. It's not merely just a resolution-based regime anymore. It's more of a rational-based regime. Compliance definitely protects an organization but it's governance which empowers and takes the organization to the next level.

Absolutely sir, that's an interesting perspective. Governance today looks very different from what it did a decade ago and it's clear that the role has become much more strategic. Building on that, let's talk about something people don't always see — the work that happens behind the scenes. What preparation steps do you feel help make board meetings more effective and lead to better outcomes?

What we see as the outcome of the board meeting on the stock exchanges is the tip of the iceberg. That's how I look at it. Understanding the regulation and how to present to the board is the 90% which happens much before the meeting — whether it's board meetings, committee meetings or even general meetings. 90% work is done prior to the meeting and to have a productive meeting this 90% is very important because people will only see the tip which is the 10%. The role of company secretary becomes more important because management is relying on us for effective decision making, effective board governance, effective board mechanism and effective regulatory information.

It is the company secretary who is not merely an administrative procedure but a governance mechanism — a governance professional to ensure that the right information reaches each member of the board, committee or shareholders as the case may be, at the right time. Because something which is not received at the right time may not be fruitful for decision making. What I understand is that great decisions are very spontaneous but a sustainable, judicious decision is the outcome of a disciplined process. The more judicious and disciplined the mechanism in the system, the better it is for the growth of the company and value creation.

I always use this word because I believe as a company secretary our motto should be value creation for the organization — and value creation doesn't merely mean financial value creation. It's the overall value creation which comes from governance, goodwill and financials. To have a productive board meeting, committee meeting or general meeting, it's more important that what happens in the boardroom remains in the boardroom. It's only the decision outcome as regulated that should be coming out. There are many things which are discussed and 90% forms part of the minutes which are a very important statutory document. The board is relying on a governance professional named the company secretary and if we are presenting the right things at the right moment, the right decisions will come and if there are right decisions definitely the value creation of the board comes up.

That's a great point sir. While people often focus on the outcomes of meetings and decisions, a lot of effort goes into preparing, coordinating and aligning stakeholders before that. So let's move to a topic that's impacting every organization today — technology. In the age of AI, what do you think are the biggest advantages for company secretaries who adopt technology early?

With AI I would not just say AI — we as governance professionals have been using software tools for a long time. For example, Dess Digital's meeting software has helped us understand and execute things in a seamless manner. However, with the change of technology coming up, it has fundamentally not changed the governance structure. What it has changed is that information flows faster to each and every person. Because the moment an event happens in the company and if it is not informed to the stock exchanges or stakeholders but comes to the market through some other means, it becomes misinformation. So we as company secretaries now need to adapt to these particular changes — with PIT guidelines, takeover guidelines and so on.

AI or any other software is not making the information — they are making it available to us. These are resources to us. How we use it depends upon the individual. Now we have come to an age where time is essence. We cannot wait for something that will come after weeks and weeks. Immediately we need something and at a click of a mouse it's available to us. That is something which is very important in this fast-moving, ever-developing dynamics of corporate governance.

Governance is needed but governance at the right time is most needed. Three days back this particular case happened — in the governance mechanism things have come to public domain at a click of a mouse. In the next 24 hours we got that information. So AI usage is not about how we use it. It's about how effectively we get the information out of it. We as professionals know the law — not the AI software. We have to use that software, apply it and get the best output from it. It is always said that the future belongs to those organizations that combine speed with accountability. This AI and usage of technology will help us understand the deficiency and be ready to eliminate the lag in a timely manner.

Absolutely sir. Technology is changing the way organizations collaborate, make decisions and manage governance processes — it's becoming an important part of staying efficient and aligned. Looking ahead, what do you think enterprises and company secretaries will expect from the regulatory ecosystem over the next five years?

First thing is that we need to create value. Something which is going to drive corporates in the future is value. Now earlier the concept was value means financials. Now it is not about financials. It's more about information and the ability of corporates to sustain the unknown — because nobody knows what unknown problem will be coming. So how we can shield ourselves from that unknown is something which is going to help us a lot. Boards and board committees are primarily focusing today on information and how organizations are going to react to that information. If there is negative information, how do we shield ourselves? If there is positive information, how do we capitalize on it for brand building?

Today's board is more receptive towards a governance dashboard — how much we are complying, compliance monitoring and AI-assisted risk management. Enhancing shareholder engagement is very important because if you have too many corporates and too many decision-making bodies, we can learn from anyone and everyone. Technology is increasingly important because information technology is giving the information but humans cannot be replaced. We have to upgrade ourselves to use those technologies.

Five years down the line I think we may not be filing forms and doing board meetings in the traditional sense — we are moving more into structured strategic decision making and the routine things will be taken care of by technology. But data is becoming so important to informed decision making and a company is not run by data alone. It is run by values. So five years down the line we will have this data mechanism no doubt, but to grow we need these values which will help us take proper informed decisions.

That's a very valuable perspective on where governance and collaboration are headed in the coming years. Sir, before we wrap up I would like to ask you one final question — for someone considering a career in company secretaryship, what advice would you give in today's fast-changing regulatory and technology-driven environment?

I always believe that no human is perfect. So accept your imperfections first. If somebody thinks that he is perfect then there's nothing called perfection. One should not aim to learn each and every regulation because it is next to impossible. Every day laws are changing. We should be aware of the changes but we should be the person whom the leadership trusts — because when important and strategic decisions are being made, it's not just about how the law will react or how governance will react. It's about how value creation would be added. So it's more important for company secretaries to accept the imperfections among themselves and learn from them and be a better version of themselves every day.

I would always say to young professionals — build a strong technical foundation today and more importantly understand the business and finance of the company in which you are working. For an employed company secretary there is one company but for a practicing company secretary the market has many, but the job profile remains the same. The goal remains the same. We should always be eager to learn and have a judicious continuous learning curve because the moment we stop learning we are stopping ourselves from the next goal of our life.

We are fortunate that we are in such a scenario where we have seen lot of changes — Companies Act changes, income tax changes, GST, and many other political things happening in India which have a direct or indirect bearing on the profession and the corporate world. It's not always about learning the law. It's always about embracing the situation, accepting the challenges and moving ahead. Don't get bogged down by the challenges because opportunities are there — how we capitalize on the challenges is going to define us. As a human being before being a company secretary, I would always suggest everyone be a better human and if you have a good mind over your body you will definitely succeed.

Be open to ideas. Be an integral centrifugal force to the decision making of the organizations. Understand the role and understand the company — that is more important. Corporates don't want a theoretical company secretary who just knows the law. We want a practical, governance-oriented professional who is ready to adapt to the challenges and advise the board. We should be like water — in whichever form we are poured we will take that shape. As a company secretary we should have that tenacity that we are not stringent to a particular mindset. We are open to all ideas and being a part of the growth strategy of a company. Governance is the art of enabling the right decision for the right people at the right time — because the right information at the right time inculcates into a better decision. That's how I would like to sum it up.

That's excellent advice for young professionals who are starting their journey in corporate governance today sir. Mr. Purohit, thank you for taking the time to share your thoughts and experience with us. It has been a very insightful discussion. Thank you to everyone who joined us today at Dess Digital. We remain committed to helping organizations strengthen governance and collaboration through technology and we look forward to bringing you more such conversations in the future. Thank you for watching.

Thank you Deepak for this opportunity. Thanks to the Dess team.