Punishment to punish or to reform

What is the role of law, criminal law more particularly. There are many theories that try to answer it. The punitive theory or the retributive theory of justice; the deterrent or preventive theory and the reformative or corrective theory all come out with different rationales for punishment or the lack of it. The recent re-arrest of the octageunarian Montana's notorious killer Frank Dryman raises some difficult questions. In a cold and snowy day in 1951 Dryman hitch hiked from Shelby by cafe owner Clarence Pellet and suddenly pulled out a gun and threw Clarence from out of his own car. Coldbloddedly he shot Pellet six times in the back. He avoided the hangman's noose, a relic of frontier justice. Decades later, the accussed a reformed human now was caught and sent back to gallows on charge of breaking the law by running away while on parole. Traced down in a Bollywood style by the The problem raises the dilemma if Frank should be punished for breaking the court's order and not completing his prison sentence then.

Criminal Jurists have different theories justifying each of their standpoints and each of them convincing enough their viewpoint.

Life for life, eye for eye, tooth for tooth and foot for foot is the essence of retributive theory of justice.The theory suggests that punishment if appropriate is a morally acceptable response to crime. It brings that psychological solace of revenge to the aggrieved party, its near ones and society. Also referred to as the punitive model of justice, it seeks to punish rather then focus on the reform of the accused.

The restorative theory instead of focussing on the abstract principles of law, justice and ethics; focusses on the needs of both the parties - the accused and the victim. It endeavours to encourage offenders to repair the harm done by them by apologizing, returning stolen money or for example doing community service'. It involves fostering a dialogue between the accused and victim and reaching a consensus wherein the ends of justice are met in a practical manner. Though this might be a good manner of resolving petty crimes such as theft or breaking traffic rules, as is increasingly been done in the developed countries; restorative model can not be acceptable for resolving henious crimes such as murder, rape or genocide which are a crime against society. The restorative theory is based on the principle of corrective theory. This is because the whole purpose of punishment is to reform the individual. Individuals turn to crime due to inadequacies in society and once they are provided the right set of environment and an opportunity to integrate into the society, they tend to reform and become better human beings. Reform, Rehabilitate, Re-educate and reintegration are the four R's of the restorative theory.

Accroding to the deterrent theory, the punishment is permissible so far as it deters further performance of a greater criminal act. The underlying principle is to set the punishment as an example such that it deters the accused and other like-minded individuals from committing a similar or more heinous crime. When such a punishment is set as a precedent, it sets an example for the society to abide by the law.

Frank not only cold-blodeedly killed the person who gave him a hitch, but also evaded from the eyes of law for four long decades before he was traced by victim's grand-son. In such a reckless case, the issue becomes not just one of punishing the individual who committed a cold-blodded murder; but also of meeting the ends of justice by appropriately punishing him for committing contempt of justice. Letting a person go free on humanitarian grounds of his being an octagenarian would be justified only if Frank sincerely repent for his wrong deeds. Any thoughts on the sensitive issue that touches us all as members of the society?

BP learns the hard way the economics of CSR

Corporate Social Responsibility is not just about being a socially responsible citizen. It has tangible market implications too. The recent oil spill disaster one of its worst in the history, has pulled down BP's shares more then 40% on widespread concerns amongst investors that it may not be able to survive the disaster. Recent decision by BP to award its shareholders with liberal bonus notwithstanding no strong reief measures going to the effected residents in the Gulf, caused great concern. The Congress in the US was pulled up for action and the Obama Government was put to the litmus test with the ensuing disaster. BP on its front , which is one of the biggest players in the industry, now faces a struggle for survival and its future hinges on legilative and regulatory decisions going forward. The tremors of aftereffects can be felt across the entire oil industry. There is a six month moratorium on deep water offshore drilling followed by a call for more stringent safety regulations. Other possible implications may include search for alternative sources of energy and more legislative intervention on environmental aspects at a global level. The call for CSR resonantes not only with ethics but revenues too.

Sony: A Future Unseen?

With losses over $450 million for the current financial year and CEO salary cheque of $ 4.5 million plus 500,000 stock options, is the Sony shine losing its sheen? Compare this with a total payment of 957 million to its 23 Directors by the competitor Panasonic for 2010 and the comparison seems one of giant versus dwarf! Important concerns have raised on Sony's ethical stand and Corporate Governance compliances. Sony is also apparently losing the market share to its investors. In this gloomy scenario, the Sony investors are compelled to ask what is the silver lining in this dark cloud. Loses for the current year notwithstanding, Sony is expected to earn a profit of 160 billion yen for the coming year. Sony presently makes Bravia TVs, Valo PCs and PS game consols. Its future success greatly depends on the success of is 3D TV and Motion controlled gaming consoles. Sony still has a good brand equity and is synonymous with quality in the minds of its customers. The future for Sony now depends on its strategy. According to industry experts, Sony's ability to transform its present vertical structure into horizontal business as successfully accomplished by Apple; by leveraging from its strong brand power will determine the directions of the wind.  

Executive Compensation: How much is too much?

One of the biggest dilemmas of Corporate Governance has been the Executive Packages. With Top Management and CEOs of Multinational receiving multi-million packages even when companies are in doldrums, the debate seems to hold an everlasting tenor. Sony CEO Howard Stringer's $ 4.5 Million plus package has renewed the global debate on Executive Compensation. The CEO received close to 410 million yen in fixed and performance related pay and options worth 500,000 shares(to be exercisable only in case the Sony shares rise). The announcement of whopping package comes at a time when Sony lost almost $ 450 million in last financial year and over $ 12 billion were washed off its market cap in the last three months.


Worldwide, CG Codes and Listing Requirements have tried to keep a check on the reckless payments to Executives especially in times when the global economy is down and the company is burdened with mounting losses.

Compensation Committee or Remuneration Committee was thought to be the panacea of the ill called unjustified Executive Remuneration. First recommended by the Cadbury Commission in 1992, the Committee was expected to rationally and fairly decide the compensation of executives, its constituent components and the manner of distribution. The Committee endeavors not just rewarding the well performing executives, but also recruiting, developing, retaining and mentoring the top talent. A well pronounced recommendation, the concept of Compensation Committee was quickly endorsed by other exchanges across the world. The Canadian guidelines embraced the initiative in 1994.

In India though there is no mandatory requirement of Independent Committees for deciding Executive Remuneration, however, the need for same was emphasized by the Government Committee on Corporate Excellence that released its report in 2000. The proposed Companies Bill, 2009 incorporates the recommendation made in 2000 report and earlier in SEBI(Kumar Mangalam Birla Committee) report to statutorily have committees for listed companies and other categories of companies to be specified in the Bill.

Inclusion of a majority of independent directors was an important step in ensuring independence and transparency in the working of the Committee. In the US, the New York Stock Exchange mandatorily required the listed companies to have a compensation committee consisting of Independent Directors. The NASDAQ listing requirements likewise mandated for independent directors led compensation committees or the independent directors on board fulfilling the requirements of independence.

Back in Japan, according to the latest CG listing requirements, Japanese companies have to reveal the pay to its executives in case it exceeds Yen 100,000,000 or $ 1.1 million. Sony's revelation of its CEO pay comes in the wake of this mandatory requirement. According to a nationwide survey by PWC, only 1.4% of Directors and 8.3% CEOs at listed companies in Japan are paid more then 100 M yen annually. So, that simply put implies that numbers receiving close to million dollar packages but less then the magic number of $ 1.1 million may raise the total figures much higher.

High Executive pay has often been justified on account of Managerial talent and paucity of such talent specially at the top levels. Reasons cited by the External Director for paying Howard more then $ 4.5 million plus stocks go even a step further. He suggested that the CEO needs to be paid keeping in consideration the Global pay levels; companies total revenue of over seven trillion yen(notwithstanding losses 40.8 billion yen), the number of employees at Sony and last but not the least the degree of complexity of business at Sony.

The reasons seem plausible specially when they come from great intellectual minds, but the ever encompassing question is how much if ever is too much and what should be done to cap this corporate greed for exorbitant pays, fat bonuses, stock options and endless perks.

Drowning Dollars in Adventorous Waters

Under the International Conventions, maritime search and rescue operations are a no cost agreement. This is based on the basic premise of Human Rights that human life is most important and invaluable. But the US teenager Abby Sunderland's US$ 94,500 worth of rescue operations in the uncharted Indian Ocean island by Australia has sparked off worldwide debates if a teenager's adventorous sports is worth the tax payers hard earned money.

International Convention for the Safety of Life at Sea, an International Maritime Safety Treaty(SOLAS), first adopted in 1914  is the most prominent of international treaties relating to safety of merchant hips. The first version of the treaty was passed in 1914 passed in response to the sinking of Titanic. It prescribed the number of lifeboats and other emergency equipments along with other safety procedures including continuous radio watches. The treaty underwent periodic amendments in 1929, 1948, 1960 and 1974. However by the time the amendments came into force, it was always late since the accepting minimum number of threshold countries with requisite tonnage limits required to give notice to the IMO, took painfully long. Consequently the 1974 version with all previous amendments included was adopted. The important breakthrough in the 1974 procedure was the simplified procedure for amending the treaty including the 'tacit acceptance' procedure wherein there is a default incorporation of amendments unless and until there is an objection filed by certain threshold of countries meeting the tonnage or number criteria. Prior to this a minimum of two-thirds of member countries were required to accep the amendments for incorporation.

Australia rightfully saved the teenager's life. But the all encompassing question is: Was it morally acceptable and ethically correct on the part of the 16 year old to chart out all alone and were her parents justified in letting their child who is yet to attain the legally adult age, sail on her own in those difficult waters. The trip was not even insured, which means that Australia's benevolent act is at best one of charity. In times of emergency one can not spark the adventure versus taxpayer's money debate; but when the storm subsides and we can sit back and think calmly, is it not time to define a legal indictment and punishment to discourage the amateur in future from taking up such risky sports.

Broadband: Broadening networks to bridge the divide

Broadband is the way to the future. With over 113 million subscribers and the numbers still galloping, China is the largest broadband market in the world.Even the technology driven, home to Silicon Valley, the United States of America, trails behind China with 87 million users. China had only 93.5 million users last year and with in a period of four quarters she added another 20 million users to her subscriber base making her the largest and fastest growing market in the world. Not only this, China, India, Vietnam and Phillippines are the world's High growth potential broadband markets, making Asia the biggest user of Broadband in the world. Last year alone, out of the total new connections,over 53% of the new broadband lines were added in the Asia-Pacific region and the mainland China contributed to over 90% of these total new connections. With India's emerging competitiveness in the IT industry, does this mean a growing area of opportunity for the Indian IT leaders. Should India climb the pyramid to provide more value-added services and focus on developing more technological capabilities. India's ability to tap this emerging market would be greatly determined by the policy-makers successfully meeting the legal and regulatory hiccups enabling the same.

Broadband and related services are here to stay in the Asia-Pacific region. With vast majority of populations still living in rural hinterlands and poor infrastructure, internet remains the best possible way to connect the people. Institutional and regulatory hiccups thwart the growth of this high potential market with difficult barriers to build data centres, lay cables and get licenses, according to analysts at Accenture. Present IT infrastructure too needs upgradation with new applications in mobiles and smartphones, internet enabled TVs and online gaming platforms like Xbox 360 slowing the network and acting like Bandwidth hogs.

Internet is undoubtedly a great connecting factor and with Information as power in the 21st century, connecting the rural areas through stronger bandwidths could well be Asia and particularly ChIndia's panacea to connect its lost crowd in the rural areas. This might as well be the key to 'sustainable growth'. In India, ITC's 'e-Choupal' initiative is one such interesting case study wherein the ITC connected the rural farmers through the power of Internet technology.

The Federal Compromise

The Federal Compromise

As the new Flemish Alliance of Bart De Wever comes to power in Brussels, every one is asking the same question- is the Belge Compromise finally coming to an end?


The Belgian Compromise bought together two radically different societies together... the thrifty centre-right Dutch-speaking north and the welfare-addicted French-speaking socialist south.

Bart, the future leader in his agenda does not outrightly knell the death of Belgium. In his promises, what he proposes is kind of federation with two separate sovereign states Wallonia and Flanders that would have a common face on foreign policy and defence front. And the call for increased sovereginity is not special to Belgium alone. All around the globe,uncomfortable compromises putting together people with different and difficult backgrounds have often asked for greater decentralization of powers, increased sovereignity and more federalism. The only Nation State where its members seem to be comfortably happy is the United States which is one of the closest forms of federalism in the present times. On a regional level, European Union that bought together knitted together uneasily fitting with a difficult history 27 Nation States together in the shades of the common denominator Euro was successful because it promised to leverage from the competencies of different economies and bring together a common political outlook on broader policy matters, without compromising on individual sovereignity. Of course to clarify on the outset, it is just a Union and has nothing to do with the concept of being a Nation State. But it draws from a theme. Is it an age for smaller Nation States to come together leveraging from each others economies to grow financially stout. Is it an age of increased decentralisation of powers and greater federalism for larger countries like India and China. Do smaller constituencies with different regional interests and ethnic backgrounds demand more personalised attention. Does this mean in the future world would mean coming together collectively at a global level and simultaneously more effective governance at a regional level. From Belgium to India to the African states to the United States this is an opportune time to reconsider Governments, form of federalism and the manner in which her subjects are governed. And with it a related thought if IT can help re-define this new wave of governing by the Government.