Sprawling Governance in Grassroots Ghaziabad & Allahabad Chapters

Sprawling Governance in Grassroots

Ghaziabad & Allahabad Chapters of NIRC of ICSI

CS IP Amit Gupta Practising Company Secretary October 02, 2020 Lucknow The views and opinions expressed in this presentation are my own views and are subject to my understanding of the subject and do not necessarily represent views of the any organization(s) to which I belong or Disclaimer had belonged in past. No part of this presentation can be copied/circulated without prior permission. Copyright © 2020, Amit Gupta, All Rights Reserved.

Amit Gupta, Company Secretary, Lucknow Gandhian Your success is always in proportion to the purity of “Means”. Though it seems to be Philosophy longer but it is shortest

Amit Gupta, Company Secretary, Lucknow What is Five Fundamental Broad Governance Questions Discussion Areas Good Governance Probity Governance in Grassroots

Importance of Panchayat Good Governance Governance

Charity 4 Q & A Governance

Amit Gupta, Company Secretary, Lucknow Governance is the process of decision-making and the process by which decisions are implemented or not implemented What is

Governance Governance can be used in several contexts such as corporate governance, international governance, national Corporate Governance governance, local governance, family governance and self National Governance governance Charity Governance

Panchayat Governance Good Governance is perhaps the single most important Family Governance factor in eradicating poverty and promoting development (former United Nations Secretary-General Koﬁ Annan) Self Governance 5

Amit Gupta, Company Secretary, Lucknow Summation of all the expectations of other individuals and Five beings concerned. Fundamental Questions Expectations are the results of interactions

Introspection Who am I? Or what am I made up The greatness or smallness of any individual entity is a of? Or what is my status in subject matter of collective perception relation to a given mission?

This iterative process of self assessment of strength and weaknesses help in standing ﬁrmly on the ground of realities and at the same time ascend the sky, to relate ourselves with the intended purposes of higher order 6

Amit Gupta, Company Secretary, Lucknow Appropriateness Five Fundamental Questions Completeness

Introspection of objectives What is the nature of my objective Fulﬁlling Social obligations or mission (in relation to my potential ability)?

Sustainability

Amit Gupta, Company Secretary, Lucknow Signiﬁcance of means over end Five Fundamental Questions Strategy contributing to sustainability of Organisation

Fixing the Strategies What should be my Strategy / Impact on Society Strategies to achieve my Mission / Objectives?

Yataah Rajaa; Tataah Prajaaha The behavior of the team members resemble that of its

leader 8

Amit Gupta, Company Secretary, Lucknow Karma Vaasanaa’ (the attitudinal ‘left-overs’ of previous Five actions) Fundamental Questions ‘Agnaana’ (the ignorance arising out of the former)

Hindrances What are the hindrance factors ‘doing what one is expected to do’ that intervene into my strategy?

‘avoiding what one has to avoid’

Amit Gupta, Company Secretary, Lucknow Accepting the barriers Five Fundamental Questions Acquiring necessary knowledge

Overcoming Hindrances Measures to overcome the hurdles Devotion and commitment to the cause and purity of or hindrances in achieving the means objectives?

Conviction and determination to do whatever ought to be done for the achievement of the objective and avoiding what ought to be avoided. 10

Amit Gupta, Company Secretary, Lucknow Participation

Good Equity

Governance Eﬀectiveness

Eight Pillars Consensus

PEE CC ATR Accountability

Transparency

11 Responsiveness

Amit Gupta, Company Secretary, Lucknow Accountability Good Governance Integrity

Objective of Probity Compliance AICPA

Probity is a quality of having strong moral principles. It includes having integrity, uprightness, and honesty. It is not just being Public Conﬁdence incorruptible and honest but also includes strict adherence to a code of ethics. For an eﬀective system of governance and for socio-economic development, probity is essential. Avoid personal gains 12

Amit Gupta, Company Secretary, Lucknow To preserve and strengthen stakeholder conﬁdence Good Governance

Importance of Good Governance To provide the foundation for a high- performing organisation Good governance does not guarantee long term success, however poor governance is certainly the “highway of business failure” To ensure the organisation is well placed to respond to a changing external environment 13

Amit Gupta, Company Secretary, Lucknow Panchayat 31.6% Urban

Population 6.4 Lakh Governance Breakup No of Villages Some Facts 68.84% Rural 2.45 lacs Gram Panchayats

Population breakup Area Covered Rural 69.00% 94% Urban 31.00% 6% 14

Amit Gupta, Company Secretary, Lucknow Developmen Panchayat t or other Grants, charge, fee Loans, received by Governance advances Panchayat etc. from government Funds Involved Money Received from other Source

15 Every Gram Panchayat has above funds at its disposal Amit Gupta, Company Secretary, Lucknow Panchayat Governance Sarpanch /Panch

Typical Structure

Governed by respective state laws Secretary nominated by Elected Members State

Amit Gupta, Company Secretary, Lucknow • Panch(s) and Sarpanch are in a ﬁduciary position vis-à-vis the Gram Panchayat Duty towards Gram Panchayat and, to that Panchayat extent, they are also deemed to be trustees of Governance the properties and assets of the Gram Panchayat Fundamental Principles

A Gram Panchayat cannot act by • They owe a duty to the people of the village and itself and it acts only through its should exercise care, skill elected members i.e. Panch(s) and Duty towards and diligence in the Sarpanch members of village d i s c h a r g e o f t h e i r functions and in the exercise of the powers vested with them. 17

Amit Gupta, Company Secretary, Lucknow All the powers vested in Panch(s) and Sarpanch are exercisable by them only collectively through decisions taken at a Panchayat validly convened meeting of the Gram Governance Panchayat

Need for Governance Code

There is no uniﬁcation in the collective decision making process as each state has codiﬁed respective rules for such decision making process 18

Amit Gupta, Company Secretary, Lucknow Panchayat Governance

Model Governance Code by ICSI

Released by ICSI in 2017

Voluntarily adopted by many Panchayats

Amit Gupta, Company Secretary, Lucknow • It strives to supplement such laws for promoting better governance in the Panchayat What it does functioning of Gram Governance Panchayat.

Scope

• It does not seek to substitute or supplant any existing laws What is does not

Amit Gupta, Company Secretary, Lucknow Gram Panchayats functioning under the diﬀerent State Government(s) are free to adopt the provision of this Model Panchayat Governance Code on Meetings of the Governance Gram Panchayat

General Principles of the Model Governance Code

If any of the provisions of this code are or become inconsistent with the applicable laws, provisions of such applicable laws shall prevail. 21

Amit Gupta, Company Secretary, Lucknow Model Governance Code Deﬁnes all important terms viz. Gram Panchayat, panch, Features sarpanch, up-sarpanch, secretary, special meeting, competent authority, Government, member, interested member etc. to bring uniformity and clarity Definitions

Amit Gupta, Company Secretary, Lucknow Model Bring clarity as to who has authority to issue notice Governance When meeting can be convened. Requirement of Code mention of meeting number, time, place & venue.

Features Minimum notice period to enable eﬀective participation of its members Meetings

Convening of special meeting to meet exigencies

Maintaining Proof of sending 23

Amit Gupta, Company Secretary, Lucknow Model Adjourned meeting Governance Code Agenda of meeting (Standard list provided)

Features Consideration of any other item

Meetings

Frequency of meeting

Quorum of meeting 24

Amit Gupta, Company Secretary, Lucknow Disclosure of interest, Quorum of non-interested Model members Governance Code Adjournment for want of quorum

Features Adjournment for other reasons

Meetings

Maintenance of attendance register (Template given)

Leave of absence 25

Amit Gupta, Company Secretary, Lucknow Model Reading of agenda at meeting Governance Code Sarpanch to explain objective, need and implications

Features Recording of minutes by Secretary

Agenda

Minutes Minutes to be read immediately after deliberations

Content of minutes 26

Amit Gupta, Company Secretary, Lucknow Model Secretary to be responsible for maintenance of minutes Governance Separate minute book for meeting of Gram Panchayat Code and its standing Committees

Features Minutes to be maintained in Hindi or other oﬃcial language of respective state Minutes

Numbering of pages

Sample format also provided 27

Amit Gupta, Company Secretary, Lucknow Model Modiﬁcation or cancellation of decisions Governance Minutes to be signed by presiding authority of the Code meeting or next meeting

Features No alteration in minutes

Minutes Minutes of Gram Panchayat to be open for inspection of all persons and certiﬁed true copy to be provided on request

Minutes to be kept in safe custody of Secretary 28

Amit Gupta, Company Secretary, Lucknow Take necessary steps to execute and implement the resolutions Model passed by the Panchayat at its Meetings.

Communicate the decisions concerning persons of respective Governance Panchayat area to them.

Code Convene Meetings of Gram Panchayat and its Committees Features Attend every Meeting of the Gram Panchayat including the Gram Sabha Meetings. Functions of Secretary

Write the proceeding of every Meeting in the Minutes Book either in physical or electronic form.

Place all the correspondence received by him, especially various schemes of the Government and instructions issued by the 29 Government, before the Sarpanch and also for the information of all the Members during the meeting. Amit Gupta, Company Secretary, Lucknow Receive all correspondence on behalf of the Gram Panchayat and Model take appropriate action on the same. Finalise, in consultation with the Sarpanch, the Agenda and Governance Notes on Agenda of every Meeting.. Maintain all the registers and records prescribed under the Code applicable laws. Report to the Block Development Officer for any vacancy in the Features office of the Sarpanch/Up-Sarpanch or a Member. Be responsible for the safe custody of Panchayat funds, assets and the records maintained by the Gram Panchayat. Functions of Secretary Report to the Block Development Officer about any illegal acts etc. by the Sarpanch or Up-Sarpanch or the members of the Gram Panchayat Comply with the instruction issued by the Government from time to time.

Maintain cordial relations with the elected representatives of 30 Gram Panchayat.

Amit Gupta, Company Secretary, Lucknow Details Numbers Charity Registered NGO’s 3.2 million No of NGO’s per 1000 (Rural) 4

Governance No of NGO’s per 1000 (Urban) 2.3

Some Facts Number of NGO’s registered are twice the number of schools and 250 times of Government hospitals

Almost one NGO for every 400 persons against one police man for every 709 persons

Less than 10% NGO’s submits ﬁnancial statements 31

Amit Gupta, Company Secretary, Lucknow Charity Governance Deemed Active Some Facts Expired 22443 6743

FCRA Registered 49860 Cancelled Estimated Receipts 20674 2.08 lacs crores 32

Amit Gupta, Company Secretary, Lucknow Charity Governance

Objectives

The Code shall be applicable on all registered entities receiving grant, donations, privileges, subscriptions and receipts of the like nature (by whatever name called) for carrying out charitable activities keeping in view the public interest and / or for the beneﬁt of public at large and / or for community. 33

Amit Gupta, Company Secretary, Lucknow

To provide for a set of guiding principles and standards for the entities established forcharitable purposes irrespective of their format of establishment.

Charity To provide a set of principles to streamline the existing systems and procedures in place thereby bringing about discipline in the Governance functioning of charitable entities.

Objectives To strengthen transparency, accountability and the internal control systems in these entities.

To develop a level of comfort and enhance trust for various stakeholders dealing with the charitable entities including corporates and regulatory authorities.

To urge the Regulators to make appropriate arrangements to facilitate eﬀective monitoring through online ﬁling and 34 digitisation.

Amit Gupta, Company Secretary, Lucknow Vision & Objectives Charity Governance Adherence to laws

Principles Eﬀective Governing Body

Code has defined certain terms also to bring uniformity Diversity

Conﬂict of Interest 35

Amit Gupta, Company Secretary, Lucknow Disclosure & Transparency Charity

Governance Community Engagement

Principles

Integrity

Sustainabity 36

Amit Gupta, Company Secretary, Lucknow Well-deﬁned, clear and concise & duly approved & communicated to public Vision and Mission statements

Charity Periodic review to adapt to the ever-changing environmental Governance scenarios. Principle 1 The goals for which the entity has been established should be well-chalked out and encased together to be called the Charter Vision & Objectives of Objectives.

Every entity, irrespective of their The Charter of Objectives to be guiding force for decision- purpose of establishment must have making and conﬂict resolution. a clear line of sight. No entity can function without direction. It is this very rationale that is the guiding Operations to be in line with its Vision and Mission directed light of the said Principle. towards the achievement of its objectives as listed in the Charter in pursuit of the public good. 37

Amit Gupta, Company Secretary, Lucknow

Every entity must prepare a list of all the laws including Acts, bye-laws, rules and regulations applicable to it at a given time. Charity

Governance Such list must be placed before the Governing Body of the entity at its meeting on aperiodic basis. Principle 2 Adherence to Laws

Compliance with applicable laws is A certiﬁcate should be obtained by an independent professional foundation of Governance stating that the entity has duly complied with the provisions of all the applicable laws.

Amit Gupta, Company Secretary, Lucknow

Clearly deﬁned roles and responsibilities Charity

Governance The entity should be guided by a well formulated policy framework covering the various areas of activity in the entity Principle 3 including Sustainability, Fund raising and investments, Project implementation, Whistle blowing, Sexual Harassment, and Effective Governing Body Remuneration of members of the Governing Body and Key Management Executives.

Governance model followed by The entity should ensure that the outlay and the proposed Governing Body is spread in team outcome of each program are placed before the Governing Body before operationalization and the same are monitored on a regular basis

Amit Gupta, Company Secretary, Lucknow

Optimum composition: The Governing Body must have an optimum combination of independent, executive and non- executive members possessing appropriate skills, knowledge and Charity experience. Governance

Principle 4 Diversity Gender Diversity: Women members bring in their own perspective in decision making and it is proven that gender The members of Governing Body are responsible for carrying out the aﬀairs of the entity, devise neutral and diverse Boards lead to better Board performance. It strategies through analysis and eﬀective problem is therefore recommended that the Governing Body should have solving. Having an optimal mix of skills, expertise at least one women member. This will go a long way in improving and experience is paramount to ensuring that the the creativity and quality in the decision making. Governing Body is equipped to make appropriate decisions

Amit Gupta, Company Secretary, Lucknow Disclosure of Interest

Charity Abstinence from the discussion/voting at the meeting

Governance The Chairman to leave the Chair to any non-interested Member for discussion in respect of the item of agenda wherein he/she is Principle 5 interested. Conflict of Interest Interested member shall neither be counted for determining the quorum nor shall the member participate during discussion and vote on the item in which such member is interested. A member of Governing Body is not prohibited from dealings/transactions of Annual disclosure of Interest. commercial/financial nature with affiliate or group entities, but is subjected to a higher degree of disclosure and scrutiny, if required. All transactions involving conflict of interest undertaken by an entity should be on an arm’s length basis and details reported in 41 the Annual Report.

Amit Gupta, Company Secretary, Lucknow All the documents and records relating to the functioning and operations of the entity shall be properly maintained.

Charity The information regarding every program undertaken by the entity should be disclosed at relevant intervals on a continuous Governance basis.

Principle 6 The entity should make necessary ﬁling at the online platform as Disclosure & Transparency and when made available by the Regulator.

The responsibility of maintaining transparency in selection of and disclosures pertaining to the Proper record of charities and donations implementation of projects falls within the ambit of the role of the Governing Body. More so, the sources of funds, the record-keeping of donations received in a timely and orderly manner goes a long way in ensuring that the highest principles of good governance are maintained in the entity. Disclosures in Annual report & website

Amit Gupta, Company Secretary, Lucknow The Governing Body should by itself or through its dedicated personnel engage in community interactions on a regular basis Charity

Governance Such engagement and interaction shall include assessment on at least two fronts - Base-Line & end-of-project and Event-based Principle 7 Community Engagement

It is imperative for the entity to realize, assess and understand the The Base-Line & end-of-project assessment shall be conducted to gauge the event-based interaction with the aim of pursuing impact of the projects, programs impact assessment of the projects undertaken by the entity and activities undertaken by the analyzing whether the outcomes are in line with the ones entity. proposed and expected at the time of taking up a project and helps an entity to maintain a proper tracking mechanism. 43

Amit Gupta, Company Secretary, Lucknow Ensuring transparency and honesty in all its decisions and disclosures towards its stakeholders

Promotion of a working environment that values respect, Charity fairness and integrity

Code of conduct: The entity should propagate the highest Governance standards of integrity

Principle 8 A Code of Conduct shall be laid down for the members of the Governing Body Integrity The Code of Conduct should be duly signed by every member of Governing Body on the date of appointment Honesty and integrity form the basis and foundation of leadership, Placing a Code of Conduct for Key Management Executives and employees the role of which in an entity is played by the Governing Body. Placing adequate mechanism for adherence to the Code of Conduct by members and Key Management Executives and 44 dealing with divergence

Amit Gupta, Company Secretary, Lucknow The entity should ensure steady and continuous ﬂow of funds and generating revenue for maintaining continuity in the projects.

Charity The entity should not depend on traditional inﬂow from donors but diversify its donor/subscription base, accept ﬁnancial support in kind, develop long term partnerships and explore new Governance opportunities as well. Principle 9 The entity should have a communication strategy that can help in showcasing the outcome of project results to the public by Sustainability releases on social media, journals, webpage, etc.

An entity, which is generally formed with Engaging volunteers for performing activities, which would help the intent of serving publicat large, is in continuity of mission without ﬁnancial outlay. required to be more sustainable than any other organization prevailing in the economyand more so precisely on three fronts – ﬁnancial, organizational and Involvement of local agencies and government to ensure programmatic improved access to the government initiatives in the projects 45

Amit Gupta, Company Secretary, Lucknow Q&A

Amit Gupta, Company Secretary, Lucknow A presentation by:

CS Amit Gupta Practising Company Secretary & IP, Lucknow

Amitguptacs 7905798954/ 9415005108

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Disclaimer: The views and opinions expressed in this presentation are my own views and are subject to my understanding of the subject and do not necessarily represent views of the any organization(s) to which I belong or had belonged in past. No part of this presentation can be copied/circulated without prior permission. Copyright © 2020, Amit Gupta, All Rights Reserved.