Corporate Governance policy in India

Group-2 SHRUTI SANGHVI PARITA SONI POOJA JAIN JINESH SHAH PRATIK CHOTALIA .

AGENDA  INTRODUCTION  PRINCIPLES  HISTORY & NEED  DIFFERENT DEFINITIONS  PERSPECTIVES  IMPORTANT ISSUES  SATYAM FIASCO  IN PUBLIC AND PRIVATE SECTOR .

They provide the guidelines :    how the company can be directed & controlled can fulfil its goals and objectives beneficial for all stakeholders in the long term . principles and processes by which a company is governed.What is corporate governance?  Corporate governance refers to the set of systems.

 Big and small organizations have their magazines annual reports which reflect their achievements.  Since Vedic times. Top to bottom. taxation. failure their profit and loss.  Be it finance. Reliance.  Few companies have also shown awareness of environment protection & social responsibilities.  Tcs . banking or legal framework each and every place requires good corporate governance. their current position in market. Tata group and Infosys amongst the major India companies having good corporate governance record. . Wipro.

 Complying with all the laws of the land.  Being transparent with regard to all transactions.  Making all the necessary disclosures and decisions.  Accountability and responsibility towards the stakeholders and Commitment to conducting business in an ethical manner. .What are the principles underlying corporate governance?  Conducting the business with all integrity and fairness.

so including knowledge of the princples and practice of corporate governance in mainstream director training is essential.  The regulatory framework: introducing more regulation has clearly failed .we need better regulation.html .applied-corporate-governance.com/importance-of-corporate-governance.Why is it important ?  Integrity: are the boards and management of companies carrying out their duties in an ethical way ?  The bonus culture: better corporate governance in financial institutions and their remuneration policies have prevented the credit crunch and resulting financial crisis. http://www.  Directors' training: prevention is better than a cure.

capital and lab our market .  In 1992 Indian economy for the 1st time here was together with world economy for product.  And which resulted into world of capitalization. .HISTORY & NEED OF CORPORATE GOVERNANCE  The “corporate governance concept” dwells in India from the Arthshastra time . business ethics which was found important for the existence of corporation in the world market place.  Corporate governance concept emerged in India after the second half of 1996 due to economic liberalization and deregulation of industry and business. corporate culture.

 . The Institute of Company Secretaries of “Corporate Governance is the application of best Management practices.DIFFERENT DEFINITIONS OF CORPORATE GOVERNACE  Cadbury Committee: (1992) “Corporate governance is the system by which companies are directed and controlled. Compliance of law in true letter and spirit and adherence to ethical standards for Effective Management and distribution of wealth and discharge of social Responsibility for sustainable development of all stakeholders”.

Stakeholders . Organization (Management) – Control perspective 3.PERSPECTIVES OF CORPORATE GOVERNANCE The perspectives of corporate governance from three points of view: 1. Shareholders (Capital Market) – Control perspective 2.Control perspective .

Globalization helping Indian companies to become global giants based on good corporate governance. Corporate governance and human resource management 6. Value based corporate culture 2. Holistic view 3. Necessity of judicial reforms 8.Innovation 7.Lessons from Corporate failure . 9.IMPORTANT ISSUES IN CORPORATE GOVERNANCE 1. Compliance with laws 4. Disclosure. & accountability 5. transparency.

 promoters of the company :Raju and his brother Rama Raju  Before starting Satyam. they were involved in other businesses like construction and textiles.Corporate Governance Failure in India: Satyam Fiasco  Satyam : incorporated in 1987  as a private limited company  providing :software development and consultancy services. .

. Raju made a shocking admission that for several years. senior managers of the company.  Analysts believed that Raju's confession of the accounting fraud had been prompted by DSP Merrill Lynch's termination as the advisors of Satyam.Raju Confessed to Accounting Irregularities  On January 07. the revenues and profits of Satyam had been inflated. without the knowledge of the board. and the auditors. 2008.

 Good corporate governance can mean generally better relationships with all stakeholders. higher growth.which is particularly important given that financial crises can have large economic and social costs. . helps address such issues as environmental protection. in turn. and greater employment creation.How Does Corporate Governance Matter for Growth and Development? The literature has identified several channels through which corporate governance affects growth and development:  Increased access to external financing by firms can lead. and can help further reduce poverty and inequality. to larger investment.  Good corporate governance can be associated with a reduced risk of financial crises. which helps improve social and labor relationships.

e. . public sector governance has avoided much of the controversies while developing along a parallel.corporate governance in public and private sector  Private sector governance. The result has been a plethora of standards for corporate governance in public and private companies. if dissimilar path of raised awareness of the need for governance standards in the public sector.  In comparison. i. governance in major listed companies. has caught much public attention in recent years due to the collapses of major corporations around the world.

Agency Heads .corporate governance in public and private sector Private Sector • Authority : Board • Responsibility : Legal Responsibility of board • Independence :Legal Independence of board Selection and appointment of members • Reporting :Annual Report to shareholders Public Sector • • • • Authority : Government Minister’s Department Responsibility :Responsibility diffused Independence :Ministerial control Reporting :Ministers of Parliament. Auditor general.

laws etc as good corporate governance. Corporate Excellence should be the end. In the age of globalization. regulations. principles.SUMMARY The concept of corporate governance hinges on total transparency. the good Corporate Governance will be achieved. morals. rules. It existed from Vedic times as the Highest standards in ArthaShastra to today’s set of ethics. good corporate governance helps as a great tool for corporate bodies. the Indian Corporate Body will shine to outshine the whole world. integrity and accountability of the management and the board of directors. Corporate Governance is a means not an end. global competition. values. . Once. thinking.

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