Professional Documents
Culture Documents
Yogesh Singh
Partner
Trilegal,
16th July 2015
Corporate Governance
WHAT IS CORPORATE GOVERNANCE?
Mechanisms, processes and relations by which corporations are controlled and directed.
Framework to identify the distribution of rights and responsibilities among different
participants in a company such as the board of directors, managers, shareholders, creditors,
auditors, regulators, and other stakeholders.
Rules and procedures for decision making process in corporate affairs.
Key Stakeholders
Board of
Directors
Shareholders
Independent
directors
Whole time/
executive and nonexecutive directors
Committees
Audit committee; Nomination & Remuneration
Committee [listed & public company if paid up capital
Rs. 100 cr & aggregate o/s debt Rs. 200 cr]
Shareholders
approval
mandatory for
certain
matters.
Auditors
Mandatory
rotation
[Listed companies
and certain classes
of unlisted cos]
Non-audit
services
Independence of
auditor
Exposed to
liabilities under
Companies Act,
2013
Company
Secretary
Mandatory
appointment of
company secretary
[Listed co. & co. exceeding
prescribed paid up
capital]
Compulsory
execution of
documents
[Exception: One Person
Company and Small
Company]
Maintenance of
secretarial
standards.
Directors disclosure of interest- to be made to board of directors and filed with Registrar of Companies
(*Certain exceptions for private companies.)
Financial statements, auditors report and directors report to be approved by shareholders and filed
with Registrar of Companies.
Board resolutions with respect to transactions which only the Board is authorized to undertake.
Enforcing Authorities
Registrar of Companies
Reserve Bank of India
National Financial Reporting Authority
Serious Fraud Investigation Office
NCLT, NCLAT and Courts of Law
Eligibility
Self
Execution
Implementation
Agency
Penalty for non-compliance: No specific penalty for non-contribution towards CSR. However,
reasons for not making such contribution required to be set out in the boards report
7
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