Professional Documents
Culture Documents
|
Presentation
by
Parvesh Aghi
r
|
|
|
|
|
|
!"#
_ =t is a system of structuring, operating and
controlling a company with a view to achieve
long term strategic goals to satisfy
shareholders, creditors, employees,
customers and suppliers, and complying with
the legal and regulatory requirements, apart
from meeting environmental and local
community needs.
3
|
!"#
_ |orporate Governance may be defined as
a set of systems, processes and principles
which ensure that a company is governed
in the best interest of all stakeholders.
_ =t is the system by which companies are
directed and controlled.
_ =t is about promoting corporate fairness,
transparency and accountability. =n other
words, 'good corporate governance' is
simply 'good business'.
2
ÿ
=t ensures:
_ Adequate disclosures and effective
decision making to achieve corporate
objectives;
_ Transparency in business transactions;
6
_ The aim of "Good |orporate Governance"
is to ensure commitment of the board in
managing the company in a transparent
manner for maximizing long-term value of
the company for its shareholders and all
other partners.
_ The fundamental objective of corporate
governance is to enhance shareholders'
value and protect the interests of other
stakeholders by improving the corporate
performance and accountability.
§
_ "|orporate governance is maximizing the
shareholder value in a corporation while
ensuring fairness to all stakeholders,
customers, employees, investors, vendors,
the government and the society-at-large.
|orporate governance is about
transparency and raising the trust and
confidence of stakeholders in the way the
company is run.
Õ
_ =t is about owners and the managers
operating as the trustees on behalf of every
shareholder - large or small." - Shri N.R.
Narayana Murthy, |hief Mentor, =nfosys
Limited.
`
!"#
|
K
_ A properly structured board capable of
taking independent and objective
decisions is in place at the helm of affairs;
KK
_ The board adopts transparent procedures
and practices and arrives at decisions on
the strength of adequate information;
K
_ The board effectively and regularly
monitors the functioning of the
management team;
K
°
K2
_ -ell governed companies mitigate µnon-
business¶ risks .
_ =ncrease efficiency of their activities and
minimize risks.
_ Get an easier access to capital markets
and decrease the cost of capital;
_ =ncrease growth rate;
_ Attract strategic investors;
_ Strengthen their reputation and raise the
level of investors and clients' trust
1ÿ
_ ðmpirical evidence and research
conducted in recent years supports the
proposition that it pays to have good |G. =t
was found out that more than 84% of the
global institutional investors are willing to
pay a premium for the shares of a well-
governed company over one considered
poorly governed but with a comparable
financial record
16
=
=
=
å
$
%
&
| '
Ú
|
_ Ministry of |orporate Affairs (M|A)
_ Securities and ðxchange Board of
=ndia (SðB=)
_ =|A=
_ =|S=
_ =|-A=
|
* Aecember 199ÿ: |== sets up task force to
design voluntary code of corporate governance.
22
|!Ú)!Ú!Ú|
|%
23
|
_ Board of Airectors
_ Audit committee
_ Subsidiary companies
_ Aisclosures
_ |ðO/|FO |ertification
_ Report on |orporate Governance
_ |ompliance
24
K *
_ |omposition- ðxecutive & non-executive
_ Not less than ÿ0% to be non-executive
_ Number of independent directors:
when there is non-executive chairman
at least 1/3rd
-hen there is executive chairman
at least ½ of the Board
_ =ndependent director has to be an non-
executive director
2ÿ
a) does not have any material pecuniary relationships or transactions
with the company, its promoters, its senior management etc.
27
Ú,!-!+|%*Ú|!Ú
28
,
_ The board shall meet at least four times a
year , with a maximum time gap of three
months between any two meetings.
_ A director shall not be a member in more
than 10 committees or act as |hairman of
more than five committees.
29
|!*!-|!*%|
_ a code of conduct shall be prepared for board
members and senior management which shall be
posted on the website.
30
)
Ú".!*
31
è %*|!,,
_ The audit committee shall have minimum three
directors as members . Two thirds of the
members of audit committee shall be
independent directors
3ÿ
)!0Ú!-%*
|!,,
_ to investigate any activity within its terms of
reference
_ to seek information from any employee
_ to obtain outside legal or other professional
advice.
_ to secure attendance of outsiders with relevant
expertise, if it considers necessary.
36
£ %*Ú|!,)
_ one independent director of holding company to be
on the board of non-listed subsidiary company.
_ audit committee of the holding company shall review
financial statements / investments of subsidiary
company.
_ board minutes of subsidiary company shall be placed
for review by the board of holding company.
38
*|!%Ú/
Ú*)ÚÚ|!
39
*|!%Ú/
)Ú!|*-Ú!,)%|%
40
*|!%Ú/
Ú,
_ Risk management procedure to be laid down
for the management and to be reviewed
periodically
_ A quarterly report certified by |ompliance
Officer on business risk and measures to
minimise risks an limitations to the risk taking
capacity of the company
_ This document shall be formally approved by
the Board.
41
*|!%Ú
Ú,%Ú!!-*Ú|!Ú
_ All the elements of remuneration of individual
directors shall be disclosed in annual report.
42
*|!%Ú
Ú!*Ú
_ All the presentations and quarterly results
made by the company to the analysts shall
be put on company¶s website .
_ A committee shall be formed to look into the
complaints of shareholders like transfer of
shares ,non receipt of balance sheet,
dividend etc .
43
*|!%Ú/
,,
44
ÿ |Ú-|!|!(|-!
!!Ú*
That they have reviewed the financial
statements and cash low statement for the
year and:
_ These do not contain any materially untrue statement
or omit any material fact
_ There were no fraudulent, illegal transactions violative
of the co¶s |ode of |onduct
_ They accept responsibility for establishing and
maintaining internal controls and have evaluated their
effectiveness.
4ÿ
6 Ú)!Ú!|!Ú)!Ú!Ú|
!!|+|
46
§|!,)|
_ The company has to obtain a certificate from
the auditors or practicing company
secretaries regarding compliance of
corporate governance.
47
1 , .2
_ Remuneration committee
_ Audit qualifications
_ Training of board of directors
_ -histle Blower Policy
48
0!0Ú)!|
_ company to have an internal policy on access to audit
committee by employees on unethical and improper
practice.
ÿ0
ÿ1