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Good governance `is good business'

By Our Staff Reporter



Chief Minister Jayalalithaa being greeted by the president and chief financial officer of PepsiCo Inc. Indra Nooyi, in Chennai on Thursday. — Photo: S. R. Raghunathan

CHENNAI, MARCH 31. Corporate governance in the U.S. is not just about compliance. "Good governance is good business," according to Indra Nooyi, president and chief financial officer of PepsiCo Inc.

Addressing a meeting organised here today by the Confederation of Indian Industry on `corporate governance post Enron - Pepsi's response to the challenges in this environment,' she said the Sarbanes-Oxley Act 2002, brought in in the U.S. in the wake of corporate scandals, was necessary.

Companies that have stronger governance practices demonstrate stronger financial returns. Such firms "generally avoid the scandals and malfeasance that plagued several well-known companies during the past four years."

Noting that the representatives of US-based multinational firms had an obligation to restore public confidence in the companies, Ms. Nooyi said: "What we do not want to do, however, is to overcorrect."

Meets CM

Ms. Nooyi later called on Chief Minister Jayalalithaa at the Secretariatand discussed Pepsico's plans in Tamil Nadu, including snack foods, breakfast foods and contract farming.

The Chief Minister indicated her Government's support to the project. Finance Secretary N. Narayanan, Rajeev Bakshi, chairman, Pepscio India, and Abhiram Seth, executive director, Exports and External Affairs, Pepsico, were present.

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