Regulatory framework of corporate

governance in India
Corporate governance means set of rules and
regulations by which an organization is governed,
controlled and directed . It is conducted by the board of
directors or the concerned committee for the benefit of
the company’s stakeholders.

We all are aware of satyam scam which is the India's

biggest corporate scam. The scam is all about corporate
governance and it is regarded as the ‘Debacle of the
Indian financial system.
 CG in India
 The position and goals of the Indian corporate sector
has changed a lot after the liberalization of 90s.
 India's economic reform programme made a steady
progress in 1994.
 India with its 20 million shareholders, is one of the
largest emerging markets in terms of the market
capitalization.
Corporate governance framework
SEBI Act 1992.
Companies Act 2013.
Clause 49 of the listing agreement of stock
exchanges.
 Security Contracts Act 1956 (SCRA)
Depositories Act 1996
 Securities exchange board of India
(SEBI guidelines)
 In 1992, the Bombay Stock Exchange (BSE), the
leading stock exchange in India, witnessed the
first major scam masterminded by Harshad
Mehta.
 As a result the government of India brought in a
separate legislation by the name of ‘SEBI Act
1992’ and conferred statutory powers to it.
 Since then, SEBI had introduced several stock
market reforms. These reforms significantly
transformed the face of Indian stock markets.
 Companies Act, 2013
The new companies law contains many provisions
related to good corporate governance like Composition
of Board of directors, Admitting woman director,
Admitting independent director, Internal audit, Risk
management committee, Audit committee,
Subsidiaries companies management etc.
Few provisions are:-
Section 134
Section 177
Section 184
 Securities Contracts Regulation
Act,1956 (SCRA)
It covers all types of tradable government
papers, shares stocks, bonds,debentures and
other forms of marketable securities issued by
companies. The SCRA defines the parameters of
conduct of stock exchanges as well as its
powers.
 Depositories Act, 1996
• The depositories act establishes share and
securities depositories and created the legal
framework for dematerialization of securities.
The terms used in depositories Act are:
• Beneficial owner
• Depository
• Issuer
• Participant
• Registered owner
 Clause 49 of the listing agreement of
stock exchanges
• It states the corporate practices that listed
companies must follow.
• With clause 49 was born the requirement that
half the directors on a listed company’s board
must be independent directors. In this clause
SEBI has put forward the responsibilities of
the audit committee, which was to have a
majority independent directors.
THANK YOU