Corporate

Group No. 7
Aditya Varma 21PGDM128
Kamal Bhakar 21PGDM140

Governance Khushi Jain 21PGDM143

Nikita Jain 21PGDM153
Raksha Kedia 21PGDM163
Shreya Gupta 21PGDM177
"Corporate governance should be done
more through principles than rules."
-Adi Godrej
 CONCEPT
Corporate governance is the combination of rules, processes or laws by which
businesses are operated, regulated or controlled.

The term encompasses the internal and external factors that affect the
interests of a:

COMPANY’S SHAREHOLDERS CUSTOMERS SUPPLIERS GOVERNMENT

STAKEHOLDERS REGULATORS
Corporate governance includes the principles of:
01 02 03
TRANSPARENCY ACCOUNTABILITY SECURITY

Responsibilities:
The Board of Directors are responsible for governance of
their companies.
The shareholders appoint directors and auditors and
hence satisfy themselves of good corporate governance.
Accountability goes hand in hand with responsibility.
Hence Board meetings are held periodically
 THE CORPORATE GOVERNANCE
PROCESS
SHAREHOLDERS

CONSENSUS
ACCOUNTABLE
ORIENTED

THE NOMINATING
COMMITTEE
GENERAL
PARTICIPATORY TRANSPARENT MEETING

GOOD AUDITORS
GOVERNANCE
FOLLOWS
THE RULE RESPONSIVE
OF LAW BOARD OF
DIRECTORS THE AUDIT

COMMITTEE
THE COMPENSATION
COMMIT
EFFECTIVE & EQUITABLE &
EFFICIENT INCLUSIVE

EXECUTIVE
MANAGEMENT
 PRINCIPLES
Lay solid foundations for Safeguard integrity in financial
management and oversight. reporting.

Make timely and balanced

Structure the board to add value.
disclosures.
Recognise and manage risk.

Promote ethical and responsible Respect the rights of shareholders.

decision making.
 Business Environment of-
trust, transparency &
accountability and
sustainable economic growth

Global Code of conduct for

Trends board members and

executives

Policies and procedures to be

transparent or disclosed to
relevant stakeholders
Best Practices

1 Governance Frameworks
effective boards,
transparency around roles and responsibilities,
accountability to, and engagement with, stakeholders, and
driving sustainable business practices.

2 Governance Documentation
It is imperative that governance documentation is accurate and kept up
to date.
Best Practices

3 Policies in line with law and applicable

regulations
Policies and guidelines are important because they address pertinent
issues, such as rules and principles for day-to-day operations

4 Documenting processes and procedures

It is important that governance processes/procedures are adequately
documented.
Best Practices

5 Effective board reporting

time-consuming and inefficient processes,
inconsistent styles, and
difficulty in ascertaining the purpose and the output required from the
board.

6 Agenda and minutes

the key points of discussion,
decisions made and, where appropriate, the reasons for them, and
agreed actions, including a record of any delegated authority to act on
behalf of the company/ organisation.
Best Practices

7 Director training and board evaluations

strategy and the longer-term plans of the company/organisation;
strong mix of skills, knowledge, experience and diversity;
information not being supplied to the board
board members not having sufficient time
directors not obtaining any formal induction training
inferior corporate governance documentation
Best Practices

8 Subsidiary governance policies

establish a subsidiary governance framework/policy;
set out rules in relation to the oversight of the subsidiaries which respect
the sanctity of subsidiaries and their decision making; and
provide guidance to the subsidiary boards on their roles and
responsibilities, and reporting requirements to the parent company.
 Why Good Corporate
Governance is needed?

Risk Mitigation and Effective decision making

compliance

Enhances shareholder Higher staff retention

value

Improved organizational Good Reputation

efficiency

Crucial during mergers Culture of excellence

& acquisitions
Financial sustainability & Reduced costs
improved capital flow
Examples of Enron
Corporate Enron's con was that the board of directors waived
Governance certain conflict-of-interest laws by allowing Andrew
Fastow, the company's chief financial officer (CFO), to
Failure form new, private companies and do business with the
company.
These private partnerships were actually used to conceal
Enron's debts and obligations, which would have
diminished the company's income.
Eventually, these manipulations in the accounts of the
firm were caught but the investors in Enron lost $74
billion and four years later the company declared
bankruptcy in December 2001.
Examples of DHFL
DHFL was the first ever fraud in a housing finance company,
Corporate which happened mainly due to active involvement of
Governance promoters in syphoning of funds and alleged money
laundering.
Failure “Bandra Books” were at the centre of the massive
corporate fraud, out of the Rs. 23,815 crores shown as
disbursed to Bandra Book, only Rs. 11,755.79 crores was
actually disbursed” to 91 entities, but was portrayed as
comprising 2,60,315 home loan accounts.
Granting of loans to related parties of promoters, who were
not credit worthy ,evergreening of bad loans, Utilisation of
borrowed funds for personal purposes are some of the
frauds committed.