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Summary

Ethics Class 08

## A BRIEF OVERVIEW OF THE PREVIOUS CLASS (1:07 PM)

## UTILIZATION OF FUNDS (1:10 PM)

- Often, the availability of Public Funds alone is considered an important factor in deciding the performance of the government in delivering services to the citizens
- Effective and efficient utilization of funds is equally important for a resource-starved country such as India
- It is important that the money spent by the government is only for the benefit of the people and is spent under the authority of law
- The government is only the custodian of public funds and not the owner and therefore it has an added responsibility to ensure judicious and effective utilization of public funds
- ***Principles governing optimal utilization of public funds***
- Money should be spent in accordance with the law
- Public funds should only be spent for public purposes and objective criteria should be followed to determine the priorities
- Outcome-driven utilization, not just inputs/outputs
- Money spent should confirm accountability and control standards
- Timely fund releases to avoid delays
- Transparency to let the citizens know the basis of decisions taken and outcomes achieved
- Inclusive approach prioritizing marginalized sections
- ***Issues involved***
- *==Underutilization==*
- "March Rush" owing to delays in fund release because of a complex process
- Delays in fund release and implementation
- Delay in finalization of plans
- Frequent changes in fund flow mechanisms and fund-sharing agreements, lists of targeted beneficiaries, and eligibility criteria
- Rigid guidelines causing suboptimal use
- *==Mis-allocation==*
- Political misuse for advertisements and irresponsible distribution of freebies
- Misplace priorities, thus ignoring essential areas
- *==Misappropriation==*
- Misuse of public funds for personal use
- Inefficient project implementation with leakages
- Redtapism and policy paralysis causing cost overrun
- **Note: *Refer to the handout for detail***

## PUBLIC SERVICE DELIVERY AND QUALITY OF SERVICE DELIVERY (1:54 PM)

- Public service delivery refers to the mechanism through which services are provided by the State to the citizens
- It may happen through two modes:
- 1. Directly through the government machinery
- 2. Indirectly through various agencies and partners who work along with the government
- Some of the key public services delivered by the government include healthcare, education, waste management, law and order enforcement, infrastructure development, etc.
- ***Quality of Service Delivery***
- Quality of service delivery is a marker/indicator of how satisfied the citizens are with the quality and standards of services provided by the government.
- One may call it a comparison between the expectations of citizens and the performance shown by the public servants.
- Quality service delivery implies the following things:
- 1. Services are to be delivered in a timely, efficient, and effective manner showing adequate care and foresight
- 2. Following the highest standards of professional ethics and morality
- *==Standards for measuring the quality of service delivery==*
- *Reliability:*
- Ability to provide a service in an accurate and dependable manner
- It also includes developing competence within the organization to deliver these services
- *Assurance:*
- The courtesy shown by the service provider and the ability to convey trust so that the customer can feel secure
- *Tangible:*
- It refers to the physical appearance of the equipment, products, and communication material given by the service provider
- *Empathy:*
- The ability to provide individualized attention to the customers and show due care toward their concerns
- *Responsiveness:*
- The willingness to help the customers including ensuring round-the-clock accessibility to the customers
- ***Challenges of public service delivery***
- Poor awareness among people about their rights
- Over-emphasis on procedures rather than the results
- Apathy and high-handedness shown by the government officials
- **Note: *Refer to the handout for detail***

## CORPORATE GOVERNANCE (3:16 PM)

- It is defined as a set of systems, processes, and principles that ensure that the functioning of a corporate entity is beneficial to all the stakeholders in the long run
- Stakeholders would include everyone ranging from the Board of Directors, Management, Shareholders, Customers, Employees, and society
- It is it duty of the management of the company to protect the trust and the interest of all the others
- ***Independent Directors***
- They are outside directors or non-executive directors of a company
- They are supposed to be appointed in publicly listed companies only and are charged with the responsibility of protecting the interest of minority shareholders
- *==As per the Companies Act 2013, the role of independent directors includes the following==*
- Safeguarding corporate values such as transparency, accountability, and responsibility in the best interest of all the stakeholders
- Bring an objective view in the evaluation of the performance of the board and management
- Scrutinize the performance of the management in meeting the agreed objectives
- Safeguarding the interest of all the stakeholders, particularly the minority shareholders
- Determine the appropriate level of remuneration for executive directors and senior management and wherever necessary recommend the removal of executive directors
- They are supposed to balance the conflict of interest of various stakeholders
- Ensure the integrity of financial information so that fraud and corruption can be prevented
- *==Appointment of Independent Director==*
- The appointment procedure shall be independent of company management and the board must ensure an appropriate balance of skills, experience, and knowledge.
- The appointment shall be approved at the meeting of the shareholders
- The notice for the meeting should include a statement that in the opinion of the board, the Independent Director proposed to be appointed fulfills the conditions under the Companies Act
- *==Removal of Independent Director==*
- Removal is carried out as per a simple majority resolution of the Board of Directors
- **Note: *Refer to the handout for detail***

## Topics for the next class: Corporate Governance (Continued), Probity