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Corporate Governance in India

Group 9
Shanthan Reddy V (246) HarshVardhan Gupta (221) Parvinder Singh Randhawa (203) Avinash Kaza (237) Kalyan Chakravarthy B (245) Aditya Singh (241)

Flow of the Presentation

Brief Introduction

Prerequisites, Constituents and Organizational & Legal Framework Clause 49 Companies Bill 2012

Guidelines at International Level

Suggestions and Opinions Case studies Future Prospects

Brief Introduction
Corporate governance is a system by which companies are directed and controlled.
It involves regulatory and market mechanisms, the roles and relationships between a companys management, its board, its shareholders and other stakeholders, and the goals for which the corporation is governed.

It includes debate on the appropriate management and control structures of a company.

Corporate governance is also concerned with mitigation of the conflicts of interests between stakeholders.
An important theme of corporate governance is the nature and extent of accountability of people in the business. Renewed interest in the corporate governance practices of modern corporations, particularly in relation to accountability.

Rights and equitable treatment of shareholders:
Organizations should respect the rights of shareholders and help shareholders to exercise those rights. They can help shareholders exercise their rights by openly and effectively communicating information and by encouraging shareholders to participate in general meetings.

Interests of other stakeholders:

Organizations should recognize that they have legal, contractual, social, and market driven obligations to non-shareholder stakeholders, including employees, investors, creditors, suppliers, local communities, customers, and policy makers.

Contd ..
Role and responsibilities of the board:
The board needs sufficient relevant skills and understanding to review and challenge management performance. It also needs adequate size and appropriate levels of independence and commitment.

Integrity and ethical behaviour:

Integrity should be a fundamental requirement in choosing corporate officers and board members. Organizations should develop a code of conduct for their directors and executives that promotes ethical and responsible decision making.

Disclosure and transparency:

Organizations should clarify and make publicly known the roles and responsibilities of board and management to provide stakeholders with a level of accountability. They should also implement procedures to independently verify and safeguard the integrity of the company's financial reporting. Disclosure of material matters concerning the organization should be timely and balanced to ensure that all investors have access to clear, factual information.

Prerequisites and Constituents

Corporate Governance practices has emerged as an integral element for doing business as they are not only a pre-requisite for facing intense competition for sustainable growth in the emerging global market scenario but are also an embodiment of the parameters of fairness, accountability, disclosures and transparency to maximize value for the stakeholders. Corporate governance is beyond the realm of law as it cannot be regulated by legislation alone. This is because legislation can only lay down a common framework the "form" to ensure standards but the "substance" will ultimately determine the credibility and integrity of the process as it is inexorably linked to the mindset and ethical standards of management.

Studies of corporate governance practices across several countries conducted by the Asian Development Bank, International Monetary Fund, Organization for Economic Cooperation and Development and the World Bank reveal that there is no single model of good corporate governance. However, a high degree of priority has been placed on the interests of shareholders, who place their trust in corporations to use their investment funds wisely and effectively is common to all good corporate governance regimes.

There are three different forms of corporate responsibilities which all models do respect:
Political Responsibilities: the basic political obligations are abiding by legitimate law; respect for the system of rights and the principles of constitutional state. Social Responsibilities: the corporate ethical responsibilities, which the company understands and promotes either as a community with shared values or as a part of larger community with shared values. Economic Responsibilities: acting in accordance with the logic of competitive markets to earn profits on the basis of innovation and respect for the rights/democracy of the shareholders which can be expressed in terms of managements' obligation as 'maximizing shareholders value'. In addition, business ethics and corporate awareness of the environmental and societal interest of the communities, within which they operate, can have an impact on the reputation and long-term performance of corporations.

The three key constituents of corporate governance are the Board of Directors, the Shareholders and the Management. Board of directors is accountable to the stakeholders and directs and controls the management. It stewards the company, sets its strategic aim and financial goals and oversees their implementation, puts in place adequate internal controls and periodically reports the activities and progress of the company in the company in a transparent manner to all the stakeholders. The shareholders' role in corporate governance is to appoint the directors and the auditors and to hold the board accountable for the proper governance of the company by requiring the board to provide them periodically with the requisite information in a transparent fashion, of the activities and progress of the company. The responsibility of the management is to undertake the management of the company in terms of the direction provided by the board, to put in place adequate control systems and to ensure their operation and to provide information to the board on a timely basis and in a transparent manner to enable the board to monitor the accountability of management to it.

The Main Constituents of Good Corporate Governance are: Role and powers of Board: the foremost requirement of good corporate governance is the clear identification of powers, roles, responsibilities and accountability of the Board, CEO and the Chairman of the board. Legislation: a clear and unambiguous legislative and regulatory framework is fundamental to effective corporate governance. Code of Conduct: it is essential that an organization's explicitly prescribed code of conduct are communicated to all stakeholders and are clearly understood by them. There should be some system in place to periodically measure and evaluate the adherence to such code of conduct by each member of the organization. Board Independence: an independent board is essential for sound corporate governance as it ensures that board is capable of assessing the performance of managers with an objective perspective Board Skills: in order to be able to undertake its functions effectively, the board must possess the necessary blend of qualities, skills, knowledge and experience so as to make quality contribution. It includes operational or technical expertise, financial skills, legal skills as well as knowledge of government and regulatory requirements.

Management Environment: includes setting up of clear objectives and appropriate ethical framework, establishing due processes, providing for transparency and clear enunciation of responsibility and accountability, implementing sound business planning, encouraging business risk assessment, having right people and right skill for jobs, establishing clear boundaries for acceptable behaviour, establishing performance evaluation measures and evaluating performance and sufficiently recognizing individual and group contribution. Board Appointments: to ensure that the most competent people are appointed in the board, the board positions must be filled through the process of extensive search. A well defined and open procedure must be in place for reappointments as well as for appointment of new directors. Board Induction and Training: is essential to ensure that directors remain abreast of all development, which are or may impact corporate governance and other related issues. Board Meetings: are the forums for board decision making. These meetings enable directors to discharge their responsibilities. The effectiveness of board meetings is dependent on carefully planned agendas and providing relevant papers and materials to directors sufficiently prior to board meetings. Strategy Setting: the objective of the company must be clearly documented in a long term corporate strategy including an annual business plan together with achievable and measurable performance targets and milestones.

Business and Community Obligations: though the basic activity of a business entity is inherently commercial yet it must also take care of community's obligations. The stakeholders must be informed about the approval by the proposed and on going initiatives taken to meet the community obligations. Financial and Operational Reporting: the board requires comprehensive, regular, reliable, timely, correct and relevant information in a form and of a quality that is appropriate to discharge its function of monitoring corporate performance. Monitoring the Board Performance: the board must monitor and evaluate its combined performance and also that of individual directors at periodic intervals, using key performance indicators besides peer review. Audit Committee: is inter alia responsible for liaison with management, internal and statutory auditors, reviewing the adequacy of internal control and compliance with significant policies and procedures, reporting to the board on the key issues. Risk Management: risk is an important element of corporate functioning and governance thus there should be a clearly established process of identifying, analysing and treating risks, which could prevent the company from effectively achieving its objectives.

Organizational Framework
The organizational framework for corporate governance initiatives in India consists of the Ministry of Corporate Affairs (MCA) and the Securities and Exchange Board of India (SEBI). The first formal regulatory framework for listed companies specifically for corporate governance was established by the SEBI in February 2000, following the recommendations of Kumarmangalam Birla Committee Report. It was enshrined as Clause 49 of the Listing Agreement. Thereafter SEBI had set up another committee under the chairmanship of Mr. N. R. Narayana Murthy, to review Clause 49, and suggest measures to improve corporate governance standards. Some of the major recommendations of the committee primarily related to audit committees, audit reports, independent directors, related party transactions, risk management, directorships and director compensation, codes of conduct and financial disclosures.

The Ministry of Corporate Affairs had also appointed Naresh Chandra Committee on Corporate Audit and Governance in 2002 in order to examine various corporate governance issues. It made recommendations in two key aspects of corporate governance: financial and non-financial disclosures: and independent auditing and board oversight of management. It had also set up a National Foundation for Corporate Governance (NFCG) in association with the CII, ICAI and ICSI as a not-for-profit trust to provide a platform to deliberate on issues relating to good corporate governance, to sensitise corporate leaders on the importance of good corporate governance practices as well as to facilitate exchange of experiences and ideas amongst corporate leaders, policy makers, regulators, law enforcing agencies and non- government organizations.

Legal Framework

An effective regulatory and legal framework is indispensable for the proper and sustained growth of the company. In rapidly changing national and global business environment, it has become necessary that regulation of corporate entities is in tune with the emerging economic trends, encourage good corporate governance and enable protection of the interests of the investors and other stakeholders. The important legislations for regulating the entire corporate structure and for dealing with various aspects of governance in companies are Companies Act, 1956 and Companies Bill, 2004. Companies Bill 2008 later revised to Companies Bill 2009 ;leading to certain amendments and reintroduction as Companies Bill 2012. A significant feature of the corporate governance reforms in India has been its voluntary nature and the active role played by public listed companies in improving governance standards in India. CII, a non-government, not-for-profit, industry-led and industry managed organization dominated by large public listed firms had played an active role in the development of Indias corporate governance norms.

Corporate laws have been simplified so that they are amenable to clear interpretation and provide a framework that would facilitate faster economic growth. The Securities Contracts (Regulation) Act, 1956, Securities and Exchange Board of India Act, 1992 and Depositories Act, 1996 have been introduced by Securities and Exchange Board of India (SEBI), with a view to protect the interests of investors in the securities markets as well as to maintain the standards of corporate governance in the country.

Clause 49 and its effect on Corporate Governance

Clause 49 of the Listing Agreement to the Indian stock exchange comes into effect from 31 December 2005. It has been formulated for the improvement of corporate governance in all listed companies. As per Clause 49, for a company with an Executive Chairman, at least 50 per cent of the board should comprise independent directors. In the case of a company with a non-executive Chairman, at least one-third of the board should be independent directors. It would be necessary for chief executives and chief financial officers to establish and maintain internal controls and implement remediation and risk mitigation towards deficiencies in internal controls, among others. Clause VI (ii) of Clause 49 requires all companies to submit a quarterly compliance report to stock exchange in the prescribed form. The clause also requires that there be a separate section on corporate governance in the annual report with a detailed compliance report. A company is also required to obtain a certificate either from auditors or practising company secretaries regarding compliance of conditions as stipulated, and annex the same to the director's report. The clause mandates composition of an audit committee; one of the directors is required to be "financially literate".

Companies Bill 2012 and its Impact on Corporate Governance

The foundations of the comprehensive revision in the Companies Act, 1956 was laid in 2004 when the Government constituted the lrani Committee to conduct a comprehensive review of the Act. The Government of India has placed before the Parliament a new Companies Bill, 2012 that incorporates several significant provisions for improving corporate governance in Indian companies which, having gone through an extensive consultation process, is expected to be approved in the 2012 Budget session. The new Companies Bill, 2012 proposes structural and fundamental changes in the way companies would be governed in India and incorporates various lessons that have been learnt from the corporate scams of the recent years that highlighted the role and importance of good governance in organizations. Significant corporate governance reforms, primarily aimed at improving the board oversight process, have been proposed in the new Companies Bill; for instance it has proposed, for the first time in Company Law, the concept of an Independent Director and all listed companies are required to appoint independent directors with at least one third of the Board of such companies comprising of independent directors.

The Companies Bill, 2012 takes the concept of board independence to another level altogether as it devotes two sections to deal with Independent Directors. The definition of an Independent Director has been considerably tightened and the definition now defines positive attributes of independence and also requires every Independent Director to declare that he or she meets the criteria of independence. In order to ensure that Independent Directors maintain their independence and do not become too familiar with the management and promoters, minimum tenure requirements have been prescribed. The initial term for an independent director is for five years, following which further appointment of the director would require a special resolution of the shareholders. However, the total tenure for an independent director is not allowed to exceed two consecutive terms. The new Companies Bill, 2012 expressly disallows Independent Directors from obtaining stock options in companies to protect their independence. In order to balance the extensive nature of functions and obligations imposed on Independent Directors, the new Companies Bill, 2012 seeks to limit their liability to matters directly relatable to them and limits their liability to only in respect of acts of omission or commission by a company which had occurred with his knowledge, attributable through board processes, and with his consent or connivance or where he had not acted diligently.

The new Bill also requires that all resolutions in a meeting convened with a shorter notice should be ratified by at least one independent director which gives them an element of veto power. Various other clauses such as those on directors' responsibility statements, statement of social responsibilities, and the directors' responsibilities over financial controls, fraud. etc, will create a more transparent system through better disclosures. A major proposal in the new Bill is that any undue gain made by a director by abusing his position will be disgorged and returned to the company together with monetary fines. Other significant proposals that would lead to better corporate governance include closer regulation and monitoring of related-party transactions, consolidation of the accounts of all companies within the group, self-declaration of interests by directors along with disclosures of loans, investments and guarantees given for the businesses of subsidiary and associate companies. A significant first, in the proposals under the new Companies Bill, is the provision that has been made for class action suits: it is provided that specified number of members may file an application before the Tribunal on behalf of members, if they feel that the management or control of the affairs of the company are being conducted in a manner prejudicial to the interests of the company or its members. The order passed by the Tribunal would be binding on the company and all its members.

The Companies Bill, 2012 seeks to provide clarity on the respective roles of SEBI and the MCA and demarcate their roles - while the issue and transfer of securities and non-payment of dividend by listed companies or those companies which intend to get their securities listed shall be administered by the SEBI all other cases are proposed to be administered by the Central Government. Furthermore, by focusing on issues such as Enhanced Accountability on the part of Companies, Additional Disclosure Norms. Audit Accountability, Protection for Minority Shareholders, Investor Protection, Serious Fraud Investigation Office (SF10) in the new Companies Bill, 2012, the MCA is expected to be at the forefront of Corporate Governance reforms in India.

Guidelines at International Level

Over the years, the issue of corporate governance has received a high level of attention. There are several reports and recommendations of the International Committees/ Associations, etc. on the development of appropriate framework for promoting good corporate governance standards, codes and practices to be followed globally. Some of the main codes and principles on the Corporate Governance are as follows:I. Cadbury Committee Report-The Financial Aspects of Corporate Governance (1992) II. Sarbanes Oxley Act (2002) III. OECD Principles of Corporate Governance (2004) IV. UNCTAD Guidance on Good Practices in Corporate Governance Disclosure (2006) V. The Combined Code on Corporate Governance (2008) These recommendations and principles have been mainly focused on structure of the company, financial and non-financial disclosures, compliance with codes of corporate governance, competitive remuneration policy, shareholders rights and responsibilities, financial reporting and internal controls, etc.

Cadbury Committee Report (1992) The 'Cadbury Committee' was set up in May 1991 with a view to overcome the huge problems of scams and failures occurring in the corporate sector worldwide in the late 1980s and the early 1990s. The report was mainly divided into three parts:Reviewing the structure and responsibilities of Boards of Directors and recommending a Code of Best Practice. The boards of all listed companies should comply with the Code of Best Practice. All listed companies should make a statement about their compliance with the Code in their report and accounts as well as give reasons for any areas of non-compliance. Considering the role of Auditors and addressing a number of recommendations to the Accountancy Profession . Professional and objective relationship between the board of directors and auditors should be maintained, so as to provide to all a true and fair view of company's financial statements. Dealing with the Rights and Responsibilities of Shareholders The Committee's report places particular emphasis on the need for fair and accurate reporting of a company's progress to its shareholders, which is the responsibility of the board.

Sarbanes Oxley Act (2002) The Sarbanes Oxley Act was enacted in the year 2002 with a view to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws and for other purposes. Some of the main provisions of the Act are:The Act called for establishment of the Public Company Accounting Oversight Board. The Act calls for the formation of an independent and competent audit committee, which is directly responsible for the appointment, compensation, and oversight of the work of any registered public accounting firm and of auditor's activities. The lead audit and reviewing partner must rotate off the audit every 5 years. It prohibits loans to any of the firms directors or executives. It requires that each annual report contain an internal control report. It prohibits any public accounting firm from providing non-audit services while auditing firm.

OECD Principles of Corporate Governance (2004) The OECD Principles of Corporate Governance were developed with a view to assist OECD and non-OECD governments in their efforts to evaluate and improve the legal, institutional and regulatory framework for corporate governance in their countries, and to provide guidance and suggestions for stock exchanges, investors, corporations, and other parties that have a role in the process of developing good corporate governance. Insider trading and abusive self-dealing should be prohibited. An annual audit should be conducted by an independent, competent and qualified auditor in order to provide an external and objective assurance to the board and shareholders. All shareholders of the same series of a class, including minority and foreign shareholders, should be treated equally. Capital structures and arrangements that enable certain shareholders to obtain a degree of control disproportionate to their equity ownership should be disclosed.

UNCTAD Guidance UNCTAD has undertaken various actions to strengthen their regulatory frameworks in order to restore investor confidence as well as enhance corporate transparency and accountability. One of the major responsibilities of the board of directors is to ensure that shareholders and other stakeholders are provided with high-quality disclosures on the financial and operating results of the entity. The objectives of the enterprise should be disclosed, such as governance objectives, like why does the company exist? etc. The objectives of enterprises may vary according to the values of society. The composition of the board should be disclosed, in particular the balance of executives and non-executive directors. The number, type and duties of board positions held by an individual director should be disclosed. Directors should disclose the mechanism for setting directors remuneration and its structure. Disclosure should be made of the process for holding and voting at annual general meetings and extraordinary general meetings, as well as all other information necessary for shareholders to participate effectively in such meetings.

Combined Code on Corporate Governance The Combined Code on Corporate Governance (the Code) is being published by the Financial Reporting Council (FRC) to promote confidence in corporate reporting and governance. Every company should be headed by an effective board, which is collectively responsible for the success of the company. The annual report should identify the chairman, the deputy chairman (where there is one), the chief executive, the senior independent director and the chairmen and members of the nomination, audit and remuneration committees. The board should undertake a formal and rigorous annual evaluation of its own performance and that of its committees and individual directors. The board should state in the annual report how performance evaluation has been conducted. There should be a formal, rigorous and transparent procedure for the appointment of new directors to the board. All directors should be subject to election by shareholders at the first annual general meeting after their appointment, and to re-election thereafter at intervals of no more than three years. The chairman should ensure that the views of shareholders are communicated to the board as a whole, as well as discuss governance and strategy with major shareholders.

Benefits and Limitations

I. Several studies in India and abroad have indicated that markets and investors take notice of well managed companies and respond positively to them. II. In today's globalised world, corporations need to access global pools of capital as well as attract and retain the best human capital from various parts of the world. Under such a scenario, unless a corporation embraces and demonstrates ethical conduct, it will not be able to succeed. III. The credibility offered by good corporate governance procedures also helps maintain the confidence of investors both foreign and domestic to attract more long-term capital. This will ultimately induce more stable sources of financing. IV. Good Corporate Governance standards add considerable value to the operational performance of a company by:Improving strategic thinking at the top through induction of independent directors who bring in experience and new ideas. Rationalizing the management and constant monitoring of risk that a firm faces globally. Limiting the liability of top management and directors by carefully articulating the decision making process. Assuring the integrity of financial reports, etc.

The instances of financial crisis have brought the subject of corporate governance to the surface which has brought to sharper focus the need for intellectual honesty and integrity. This is because financial and nonfinancial disclosures made by any firm are only as good and honest as the people behind them. Effective governance reduces perceived risks, consequently reduces cost of capital and enables board of directors to take quick and better decisions which ultimately improves bottom line of the corporate. Adoption of good corporate governance practices provides long term sustenance and strengthens stakeholders' relationship. Adoption of good corporate governance practices provides stability and growth to the enterprise.

Suggestions and Opinion

Corporations are the prominent players in the global markets. They are mainly responsible for generating majority of economic activities in the world, ranging from goods and services to capital and resources. The essence of corporate governance is in promoting and maintaining integrity, transparency and accountability in the management of the company as well as in manifestation of the values, principles and policies of a corporation. Many efforts are being made, both at the Centre and the State level, to promote adoption of good corporate governance practices, which are the integral element for doing and managing business. However, the concepts and principles of good governance are still not clearly known to the Indian business set up.

Hence, there is a greater need to increase awareness among entrepreneurs about the various aspects of corporate governance. There are some of the areas that need special attention, namely: Quality of audit, which is at the root of effective corporate governance. Role of Board of Directors as well as accountability of the CEOs and CFOs. Quality and effectiveness of the legal, administrative and regulatory framework etc. That is, it is necessary to provide the corporate desired level of comfort in compliance with the code, principles and requirements of corporate governance; as well as provide relevant information to all stakeholders regarding the performance, policies and procedures of the company in a transparent manner. There should be proper financial and non-financial disclosures by the companies, such as, about remuneration package, financial reporting, auditing, internal controls, etc.

Case Study Satyam Computers

Satyam Computer Services Limited was founded in 1987 and was one of the big four IT Companies in India with a $2.1 billion dollar revenue. It had employed over 53,000 IT Professionals in over 67 countries with development centers in over 20 countries. The company has been currently taken over by Tech Mahindra (a joint venture with British Telecom), 6th largest IT firm in India. The new company formed as a result of this merger is called Mahindra Satyam. The company continues to be listed on the NYSE Euro next exchange and has reportedly stabilized its operation after the takeover by the Mahindra Group, a family owned business group too.

Case Study Satyam Computers

The Scandal
Satyams troubles started when the World Bank, one of the biggest clients for Satyam, announced that two of Satyams employees had hacked into their systems and managed to access sensitive information. To follow this up, the company was jolted again by Ramalinga Rajus (Chairman, Satyam) announcement to influx $ 1.6 billion dollars into the acquisition of Maytas Infrastructure and Maytas Properties. Upaid Systems alleged Satyam of intellectual fraud and forgery and made a claim of $1 billion, adding to the companys woes Raju wrote a letter to the board and the SEBI (Securities and Exchange Board of India) explaining the accounting fraud and the over inflated balance sheets.

Case Study Satyam Computers

Having discussed the background of this scandal, let us summarize the failures in Corporate Governance at Satyam: Decision of Maytas acquisition was announced without shareholder approval. Ramalinga Raju had only 8.5% stake in the company. How could he manage to take such a big decision without the approval of distributed shareholding with a total stake of 91.5%? Besides, Maytas was a company in which he and his sons had a major stake. So his interests in that company were known to the board. Transferring $1.6 billion from Satyams books to Maytas was like transferring money from the company to own pockets (because Raju and Family had only 8.5 % stake in Satyam whereas the stake in both the Maytas companies was 30% +). This is a serious failure as per the Arms Length Principle (ALP). How did the board approve the deal?

Case Study Satyam Computers

Failures in Corporate Governance at Satyam:-

Raju justified the investment of company resources into his sons companies by calling it diversification of investment. If it was genuinely diversification, why was a novice company like Maytas chosen instead of the several other reliable options available in the market?

Kingfisher Airlines -- Corporate Governance

Kingfisher Airlines Limited is an airline group based in India owned by Dr. Vijay Mallya. Kingfisher Commenced its operations on May9, 2005 Kingfisher Airlines was the holder (along with only a few other airlines) of the 5-star rating by Skytrax along with Cathay Pacific, Qatar Airways

Problems with Kingfisher Airlines

Bad Governance Absence of professional management. Individual decision takers. Lack of delegation is being talked about as the major move that Mallya did not undertake when running the airline. After acquiring Air Deccan, Kingfisher suffered a loss of over 1,000 crore for three consecutive years.

Even though India is a price sensitive country, kingfisher owner, Vijay Mallya maintained high fares for the airlines. Huge amount of bank loans with high interest rates. High investments to promote the brand name kingfisher to makeup for the prohibition on advertising for the business of alcohol. It had also been hit badly by external factors.

Numbers and Statistics

Kingfisher has an outstanding debt of over Rs 13,000 crores. Over Rs 6,000 crore of accumulated losses Kingfisher shares have lost around 67% of their value in 2011 The share value reached a record low on 11-Nov- 2011, reducing the carriers market value to around USD213 million. Kingfisher falls deep into the red in 2nd Q FY2012 with 16th consecutive quarterly loss; net loss margin of --29%

Introduction of professional management into the board. Route rationalization: Cutting back unprofitable sectors and services to several cities. Debt recast: asking banks to reduce rates or take a cut on loans Decisions should be not be taken by the Mr. Mallya itself alone but it should be consulted with BOD. Raising capital: it has plans to raise $ 200 MILLION through GDR. FDI: Now the FDI limit is raised and foreign airlines are allowed to buy a stake, Mr Mallya could recapitalise kingfisher

Future Prospects
As the global environment changing continuously, there is a greater need of adopting and sustaining good corporate governance practices for value creation and building corporations of the future However, inapt application of corporate governance requirements can adversely affect the relationship amongst participants of the governance system

If companies are to reap the full benefits of the global capital market, capture efficiency gains, benefit by economies of scale and attract long term capital, adoption of corporate governance standards must be credible, consistent, coherent and inspiring. Hence, in the years to come, corporate governance will become more relevant and a more acceptable practice worldwide