1
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