Overview of Corporate Governance Unique Dimensions of Banks Governance Bank Boards, Directors, & Governance

Corporate Governance is the system by which companies are directed and controlled
Cadbury Report (UK), 1992

to do with Power and Accountability: who exercises power, on behalf of whom, how the exercise of power is controlled.
Sir Adrian Cadbury, in Reflections on Corporate Governance, Ernest Sykes Memorial Lecture, 1993

fundamental objective of corporate governance is the enhancement of the longterm shareholder value while at the same time protecting the interests of other stakeholders.
SEBI (Kumar Mangalam Birla) Report on Corporate Governance, January, 2000

Trusteeship obligations inherent in company operations, where assets and resources are pooled and entrusted to the managers for optimal utilisation in the stakeholders interests.

Corporate governance is essentially about leadership:

leadership for efficiency; leadership for probity; leadership with responsibility; and leadership which is transparent and which is accountable.

- PRINCIPLES FOR CORPORATE GOVERNANCE IN THE COMMONWEALTH

The Manner in which a Corporation is Run

Achieving its Objectives Transparency of its Operations Accountability & Reporting Good Corporate Citizenship

The Processes & Operating Relationships that Best Achieve Organisational Goals

Provide/ Exercise

Leadership and Strategic Guidance Objective Judgement Independent of Management Control over the Company

Direct and Control the Management of the Company Be Accountable at all times to All Shareholders

REGULATION & LEGISLATION Regulators (SEBI/RBI)

Lenders (Banks/ Depositors)

Government Legislation

Stock Exchanges Listing Agreements

Shareholders/ Stakeholders

Listed Corporations (The Board & the Executive)

Market Operators (Rewards)

Institutional Investors Press/Media (Pension Funds/Insce Cos) (Opinion Makers)

Market Operations, Critique & Monitoring

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An Enterprises Triple Effect on Society

Sustainable Development Waste Control Equal Opportunities Education & Culture Community Regeneration

Emissions Business Impact Energy Use Product Life-cycle Product Value Wealth Generation Productive Employment Ethical Trading

Economic

Human Rights Employee Volunteers

economics

Business Impact

environment

society
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Right-Size the Board and its Composition Complementary Skill-Sets & Financial Acumen Essential Fit & Proper Criteria for Membership More Focus on Oversight, Less on MicroManagement Contribution as Important as Surveillance

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Minimise Conflict of Interest Potential Respect Minority / External Shareholders Rights (Listed Public Sector Banks) Bank Boards to Go That Extra Mile: Go Beyond What is Prescribed to What is Appropriate That Way lies Greater Valuations & Better Reputations

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By:-Shubham Singh

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