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CORPORATE

GOVERNANCE
Sourabh Garg, 117

Sakshi Joshi, 111

Sanjay Pal, 112

Prateek Nahar, 106


INTRODUCTION
• Meaning hardly understood.

• Much talked about because of :-


a) Curious happenings in business world.
b) Difference in corporate governance
systems around the world.

• Mechanism by which procedures of


a corporation are indicated.

• The concept not new for Indian


tradition.
IMPORTANCE &
CONCEPT
• Lay foundation for progress of business.

• A source of competitive advantage.

• Maximize long-term shareholders value.

• According to The Institute for Company


Secretaries of India it is- application of
best management practices, compliance
of law, adherence to ethical standards,
distribution of wealth & discharge of
social responsibility.
ELEMENTS OF GOOD
CORPORATE
GOVERNANCE
• Role and powers of Board
• Legislation
• Board Skills and independence
• Board appointments and meetings
• Board induction and training
• Business and community obligations
• Financial and operational reporting
• Code of conduct
• Management environment
• Monitoring the Board performance
CORPORATE
GOVERNANCE

PRINCIPLES
Ensuring the Basis for an Effective
Corporate Governance Framework

• Rights of Shareholders and Key Ownership


Functions

• Equitable Treatment of Shareholders

• Role of Stakeholders in Corporate


Governance

• Disclosure and Transparency


Thoughts on Corporate
Governance
M. Damodaran :Investment and not as an expenditure

 V.R.S. Natarajan, CMD, Bharat Earth Movers Ltd: Ensuring


transparency in operations, performance, growth

N.R. Narayana Murthy, Infosys Technologies Ltd.: Necessity, and no


longer a luxury

V.C. Burman, Chairman, Dabur India Ltd.:that good corporate


governance and impeccable track record

 Dr. Pratap C. Reddy, Chairman, Apollo Hospitals Enterprise Ltd:


Enhance shareholder value , instrument of investor protection.
 
Kumar Mangalam Birla committee
on Corporate Governance

 Several corporate governance structures

 Extends beyond corporate law

 The committee has primarily focused on investors and shareholders.

 Committee believes that its recommendations will go a long way in


raising the standards of corporate governance
N.R. NARAYANA MURTHY
COMMITTEE ON CORPORATE
GOVERNANCE

• Committee primarily related to audit


committees, audit reports, independent
directors, related parties, risk management,
directorships and director compensation,
codes of conduct and financial disclosures.
SEBI
• There are those who will tell you that
business and ethics cannot stand together.
In the short run it might appear that
companies pay a price for adhering to
values while their competitors get ahead in
a shorter time frame, but in the long run
people would learn to distinguish,
stakeholders learn to ask the right
questions, and distinguish between the
grain and chaff. Those that don't subscribe
to values will fall by the way side; those that
subscribe to values will last the course and
will set benchmarks."
M. Damodaran Chairman, Securities
and Exchange Board of India
OIL AND NATURAL GAS
CORPORATION LTD. (ONGC)
 
• ONGC has been practicing corporate governance
principles much before it became mandatory.

• It is an ongoing measure of superior


delivery of company’s objectives with a
view to translate opportunities into reality.

• Aligning its activities to national need,


shareholders benefit and employee growth,
thereby delighting all its shareholders,
while minimizing the risks
INFOSYS TECHNOLOGIES
LTD. ON CORPORATE
GOVERNANCE
• Satisfy the spirit of the law and not just
the letter of the law.  Corporate
governance standards should
• Go beyond the law.
• Be transparent and maintain a high
degree of disclosure levels. When in
doubt, disclose.
• Take a clear distinction between personal
conveniences and corporate resources.
• Communicate externally, in a truthful
manner, about how the Company is run
internally.
• Comply with the laws in all the countries
in which the Company operates.
• Have a simple and transparent corporate
structure driven solely by business needs.
ICFAI UNIVERSITY PRESS ON
CORPORATE GOVERNANCE
• Failure of Accounting or Corporate Governance- The
exposure of corporate failures in quick succession led to serious public
concerns
• Corporate Governance to Sustainability- Sustainability which
gives a holistic perspective of the organization's initiatives and depicts
its commitment to stakeholders is a concept gaining ground
• Wealth of Companies and Corporate Governance- The
emergence of corporate power a great challenge to the industry
captains and the government alike in their endeavors to ensure that
the corporate sector performance matches the stakeholder
requirements
Cont.

• From Compliance to Competitive Advantage- Corporate governance


is a priority for firms because it presents opportunities to manage
risks and add value.

• Role of Audit Committee- The independence of Audit Committee is of


vital importance in the discharge of the functions of the Board
INSTITUTE OF CHARTERED
ACCOUNTANTS OF INDIA

• Globalization and Competition- Globalization has changed the


economies across the world. the competition regime will open a new
horizon for the development.
• Using ‘Dharma’ in Corporate Governance- The code of
conduct that takes care of ‘public’ money is being increasingly
scrutinized and tested on ‘ethical’ standards.
• Looking Beyond Corporate Governance Code- A time has
come to redefine the relationship between the shareholders,
management and Board of Directors in the context of managing a
corporation.
Corporate Social
Responsibility
• Corporate social responsibility (CSR)
is a company’s obligation to be accountable to
all of its stakeholders in all its operations and
activities with the aim of achieving sustainable
development not only in the economical
dimension but also in the social and
environmental dimensions
Corporate Social
Responsibility
Reason behind CSR

• Capital reputation

• Eco-Social Perspective

• Rights to information
Advantages of CSR
• Increased sales
• Customer loyalty
• Creating new business opportunities
• Enhanced reputation
• Brand value
• Tax benefits
CSR IN INDIA
The concept of CSR came into existence
in early 1970s but it took some time
for the Indian Companies to
understand their role towards
society.

• It was only in late nineties that few


companies had came forward with a
proper guideline to show their
seriousness towards CSR. And now
many large companies issues a
CORPORATE
SCANDALS
CONCLUSION
Every individual has to start
culturing the human values in the
inner world of himself because
they say,
“Those who can see the deepest
into the past can also see farthest
into the future”