In Conversation With Ranjan Kumar, Director - Ethics, Legal & Compliance, SKF (India & South East Asia)

Mr Kumar, we’d love to know about your journey so far, your most memorable experiences, and your thoughts on India’s promising legal ecosystem right now. 

After completing my Law Graduation from Delhi University and receiving the ICSI membership, I started my journey working with companies across different industries & geographies. My more than two decades of professional journey have helped me grow with India’s fast-evolving legal ecosystem.  

Indian economy and business environment have seen significant transformational changes in the last two decades and so has the expectation of businesses from the country’s legal ecosystem. From the twelfth-largest economy in 2007, the country has become the world’s fifth-largest economy today, poised to grow further. Globally, the business environment has taken a new shape and India too has experienced several favourable transformations. In fact, India’s legal ecosystem still has an evolving path to cover.  

I was thoroughly pleased to witness the agility, quick tech-adaptability and maturity demonstrated by India’s legal ecosystem in this fast-growing economy and rapidly challenging business environment.  

What would be your advice to youngsters wanting to make a mark as an in-house lawyer? 

Firstly, it is important for youngsters to understand the difference between the roles and expectations of an in-house lawyer vis-a-vis an external legal Counsel. In this demanding business environment, an In-house lawyer cannot just confine themselves as a mere legal adviser. Most importantly, they need to understand where the business is headed and collaborate with the business team to be able to achieve the overall organizational objectives. Secondly, as the In-house Lawyers are expected to be an integral part of the business, having business acumen along with good knowledge of the operations is crucial. To summarize, business collaboration, agility, customer-centricity and a solution-oriented mindset are the need of the hour.   

Over the years GCs have earned a place amongst the C-Suite executives and have become part of the 'Board' holding directorial positions, how do you foresee the role of a General Counsel evolving in the next 5 years? 

Today, GCs are observed to have a strong collaboration and integration with the business and operation teams. This, along with the unique values they bring to the table, has made GCs an inevitable member of the management or Board. With their in-depth knowledge of and/or involvement in almost every aspect of business, I clearly see GCs emerging as strong business leaders in the very near future.  

What to your mind has been the biggest legal development of 2022 that had a direct bearing on Corporate India? 

Post-pandemic norm of remote working has compelled organizations to re-look at their overall risks and controls. The stressed business environment has increased the risk of compliances, especially around – anti-trust, anti-corruption, data protection & cyber security, among others. Additionally, the existing geo-political situation has further posed the risk of non-compliance with international trade sanctions. And on top of these, the post-pandemic culture shift within the organizations has exposed the companies to an increased risk of work ethics violations. Considering these emerging threats and risks, one of the biggest legal developments of 2022 for corporate India is the need for revisiting and refreshing its compliance and assurance framework to be better positioned to deal with the new and evolving challenges and business environment.  

As an important cog in the wheel, how would you rate India's overall corporate governance framework? Any glaring grey areas that require urgent attention? 

As far as structural and regulatory changes are concerned, India has witnessed several enactments (viz., the Companies Act 2013, SEBI's LODR Regulations, etc.) which contribute significantly in strengthening corporate governance norms in India. However, even though India’s corporate governance model is one of the best models around the world, yet we observe plethora of corporate scams from time to time. Some of the recent cases have highlighted the need for a stronger application of corporate governance principles.  

With the learnings at hand, its important to strengthen these principles by clearly defining the accountabilities, ensuring real independence, and bringing more transparency for each stakeholder in the organization, be it the Board, Independent Directors, or Auditors.  Few of the areas that require higher focus are – independence of Board, better governance and disclosure of RPTs (Related Party Transaction), better protection of minority shareholders’ interest and, last but not the least clear expectations from Independent Directors.  

Business models are evolving quickly and transactional complexities are increasing. What would be your playbook for developing a robust compliance framework that not only mitigates the legal risks but also sets a benchmark in the industry? 

The compliance framework differs from company to company as it is developed considering the risks involved in its operation, sufficiency and efficiency of existing controls and, maturity of its existing compliance and assurance framework (if any). So, a few of the most critical aspects one should keep in mind while developing a robust compliance framework, are:  

• Risk-based approach: apply a risk-based approach to understand the priorities/needs of your company.  

• Maturity assessment: conduct a fair maturity assessment of your existing compliance framework (if any) to identify gaps / its relevance. 

• Commitment from top: ensure inclusiveness & full ownership of the entire leadership team, as compliance is everyone’s job.  

• Objective & Scope: define clear scope & objectives of your compliance framework considering the need, priorities & risk tolerance of your organization. The compliance program should cover both internal & external risks. 

• Governance: develop a clear governance of the company’s compliance & assurance systems. It is generally based on the principles of Prevention – Detection – Correction. The framework should clearly include the preventive, detective & corrective mechanisms/tools while defining clear accountabilities. 

• Consequence management: define the consequences of deviations. 

• Periodic review Considering the fast-changing business environment, the Compliance Program should be reviewed frequently to keep it relevant & consistent improvements. 

How do you foresee compliance changing with the emergence of legal tech and AI? 

Like any other field, new and emerging technologies are positively impacting India’s legal ecosystem too. And this has helped the organizations in strengthening its compliance and assurance environment. Now is the time for compliance and assurance teams to take lead in this transformation for improving their effectiveness. With speedy adaptation of new-age technologies, we can clearly see the beginning of a positive change in India’s legal ecosystem. 

Do you still get time to pursue your hobbies? What does life outside work look like? Would you please recommend one book that has left a lasting impression on your mind? 

For me, spending time with my family is what I love doing the most. Apart from that I enjoy both listening to music and cooking as they are my stress busters. I recently read “The Four Agreements” book authored by Don Miguel Ruiz, which really impressed me with its simplicity and clarity of thought around self-reflection. It resonates closely with the daily introspections of a corporate professional or a business leader in building self-awareness. This may be a good read for our young legal professionals.