CORPORATE GOVERNANCE IN INDIA

Corporate Governance in India


Presented By:
Rathin Bachhar

30 nov 2014

Introduction

u  The last few years have seen some major scams and corporate collapse across the globe

u  In India, the major example is satyam which is one of the largest IT companies in India

u  All these events have caused the pendulum of public faith to shift away from free market to a more a more closely regulated one

 What is Corporate Governance?

“Corporate Governance is nothing but a step towards strengthening of the organization so as to face the challenges”

“It is stepping into the shoes of the shareholders, stakeholders, vendors, suppliers & employees by the Top Managers and CEO of the company”

“Process and mechanisms by which the capital market monitors the actions of corporate management”

Structure of Corporate Governance

Why Corporate Governance?

u  TRANSPARENCY

u  ACCOUNTABILITY

u  CONTROL

u  TRUSTEESHIP

u  ETHICS

The historical roots of corporate governance :

u  World wide privatization wave.

u  Mergers and takeovers.

u  Deregulation and capital market integration.

u  Scandals and failures at major corporations

Emergence of Corporate Governance in India

u  SEBI appointed in May 1997 the Kumar Mangalam Birla Committee

u  Companies Amendment Act, 2000 introduced

                        - Setting up of Audit Committee

                        - Directors’ Responsibility Statement

u  Kumar Mangalam Birla Committee recommendations adopted by SEBI in 2000

u  Clause 49 introduced in Listing Agreement

u  Narayana Murthy Committee recommendations revised Clause 49

u  Definition of independent directors

u  Certificate by CFO & CEO

u  Risk Assessment & Mitigation strategy of the company

u  Code of Conduct for top Management

International level of Corporate Governance Committee

u  Cadbury committee report-financial aspects of corporate governance (1992)

u  Greenbury committee report on Director’s remuneration (1995)

u  Hampel committee Report on Corporate Governance (1998)

u  The combined code, principles of good governance and code of Best Practice, London Stock Exchange (1998)

u  Calper’s global principals of Accountable corporate Governance (1999)

u  Blue ribbon report (1999)

u  King committee on corporate governance (2002)

u  Sarbanes Oxley Act (2002)

u  Higgs Report (2003)

u  The combined code on corporate Governance (2003)

u  ASX Corporate governance council Report (2003)

u  OECD principles of Corporate Governance (2004)

u  The combined code on corporate Governance (2003)

u  UNCTAD Guidance on Good Practices in Corporate Governance Disclosure (2006)

u  The combined code on corporate Governance (2008)

Driving Forces of Corporate Governance in India

u  Unethical business practices

u  Impact of globalization

u  Impact of privatization

Conclusion

u  Corporate governance mechanism should be flexible and suitable

u  More effective coordination & corporation between SEEBI

u  Overall ethical values in all segments should be promoted for effective

THANK YOU