Corporate Governance in India:

SEBI Code of Corporate Governance:

To encourage good corporate governance, SEBI (Securities and Exchange Board of India)
constituted a committee on corporate governance under the chairmanship of Kumar Mangalam
Birla. SEBIs Board, in its meeting held on January 25, 2000, considered the recommendations
of the Committee and decided to make the amendments to the listing agreement on February 21,
2000 for incorporating the recommendations of the committee by inserting a new clause in the
Equity Listing Agreement i.e. Clause 49...

An overview of SEBI guidelines on corporate:

(a) Board of Directors:

(b) Audit Committee:

(2) The audit committee has the authority to:

1. Investigate into any matter falling under its domain.

2. Obtain information from the employees

3. Obtain outside professional advice and internal records of the company

(3) Audit Committee is expected to:

1. Reviewing the adequacy of internal audit function

Discussion with statutory auditors before the audit commences, about the
nature and scope of audit as well as post-audit discussion to ascertain any
area of concern
2. Oversight the financial reporting process and the disclosure of its financial
information to ensure that the financial statement is correct, sufficient and
credible
3. Evaluation of internal financial controls and risk management systems
4. Recommend to the board the appointment and if required, the removal of
statutory auditor.

(c) Remuneration of Directors

(d) Board Procedure:

Though the Companies Act puts a ceiling of 15 directorships of public companies, among public
companies, listed ones demand a much greater degree of commitment from an Independent

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Director, including attending at least four board meetings and several meetings of one or more of
the many committees during a year.

(e) Management:

Annual report should have Management Discussion along with Analysis Report.

(f) Shareholders:

(g) Report on Corporate Governance:

Companys annual report should contain a whole section on corporate governance in detailed
form.

(h) Compliance:

There should be a certification on the compliance of the corporate governance by the companys
auditors.

The Objectives of Corporate Governance:

In the consistent changing business scenario of India, corporate governance provides with strict
and efficient management practices with legal compliance

Under The Indian Companies Act of 2013, innovative processes are given an introduction to
promote transparency which is very important for the growth and beneficiary to business.
Transparency in corporate governance is essential for the growth, profitability and stability of
any business in todays world of intense competition.

Investment advisories provide information about all the aspects of these newly launched
processes and norms. These processes and norms aim towards enhancing corporate government
in our country.

The senior management is responsible in ensuring good corporate governance, so they should
have control over company affairs to protect the interests of the stakeholders and the company.
Also, advisory firms provide with efficient management of the business activities protecting the
growth and stability, also, the reliability and reputation for the clients and customers.

New Provisions introduced for Directors and Shareholders:

Every company has to make accurate disclosure of financial situations, performance,

material matter, ownership and governance.

Top management recognizes the rights of the shareholders and ensures strong co-
operation between the company and the stakeholders

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 The Independent Directors are a newly introduced concept under the Act.

The Independent directors must attend at least one meeting a year.

Filing and disclosures with the Registrar of Companies has to be increased.

Every company must appoint an individual or firm as an auditor. The responsibility of the
Audit committee has increased

The maximum permissible directors cannot exceed 15 in a public limited company. If

more directors have to be appointed, it can be done only with approval of the
shareholders after passing a Special Resolution.

One or more women directors are to be recommended.

Additional Provisions

Changes in Clause 35B The shareholders to be given, for any resolution, the facility of
e- voting, is a legal binding for the company.

Related Party Transactions

Whistle Blower Policy

Corporate Social Responsibility

Importance of Corporate Governance in our country:

It protects the interests of the stakeholders and the management, fostering progress on the
economic front of our country.
Good corporate governance ensures higher degree of faith amongst the companys
shareholders contributing to a positive atmosphere hence, leading to growth in every
aspect.
Indian Companies Act, 2013 provides with norms to balance legislative and regulatory
reforms so as to increase FDI and ensure the growth of the business.
The audit and finance functions that affect the morale, legality and ethics of the business
are focused under the corporate practices of our country.
The norms in the act provide with the increased participation of the shareowners in
decision making ,thus, working in the welfare of the society as well as the business by
establishing transparency in corporate governance
Also, when it comes to investment from the foreign institutes, it is one of the necessary
criteria.