Corporate governance

• In the late 1990s, SEBI constituted a number of committees to help prepare corporate governance standards for listed companies in India.
• 

–Code of Conduct published by Confederation of Indian Industry[CII] in 1998

–Kumarmangalam Birla Committee set by SEB[I999]
–Ministry of Corporate Affairs [MCA], India formed the first Naresh Chandra
Committee[2000],following the enactment of Sarbances-Oxley Act in the USA.
–Naresh Chandra Committee, submitted its report in 2002.
–Narayana Murthy Committee, also submitted its report in 2002. Based on someof the
recommendation of this committee, SEBI revised Clause 49 of the listingagreement in August
2003
–National Foundation for Corporate Governance set by Ministry of Corporate Affairs [MCA]
–Ministry of Corporate Affairs [MCA] convened by the Irani Committee in 2004,Ministry of
Corporate Affairs [MCA],companies(Amendment) Bill, 2009
–Ministry of Corporate Affairs [MCA] released a set of Voluntary guidelines for corporate
governance
• 
• The first major initiative was undertaken by the
Confederation of Indian Industry(CII).
• Influenced by Anglo-Saxon Model of corporate Governance
,CII drew up a voluntary Corporate Governance Code.
• Many companies wholeheartedly adopted welcomed this
initiative and adopted it. , But later on it was “felt that
under Indian conditions a statutory code would be far more
purposive and meaningful
• Consequently ,the second major corporate governance
initiative in the country was undertaken by SEBI. In early
1999,it set up a committee under Kumar Mangalam Birla
• The Birla committee specifically placed emphasis on
independent directors in discussing board recommendation
and made specific recommendation regarding board
representation and independence .
• The committee also recognized the importance of audit
committees and made many specific recommendation
regarding the function and constitution of board audit
committees .
• The Naresh Chandra committee -was appointed in August
2002 by the Department of company affairs (DCA)
• The committee recommendations - two key aspects of
corporate governance –
financial and non –financial disclosures and
independent auditing and board oversight
of management .
• The fourth initiative -Narayana Murthy Committee .
This committee was set up by SEBI - to review clause 49, and
to suggest measures to improve corporate governance
standards.
Some of the major recommendations - audit reports,
independents directors, related party transactions, risk
management , directorships and director compensation ,codes
of conduct and financial disclosures.
• Irani committee ASSISTED the Government of India IN
introducing the Companies Bill , 2008 , characterized by best
international practices that foster entrepreneurship and
investment .
 International
• Cadbury committee on Corporate Governance – 1992
-Stressed on financial reporting and auditing
-Accountability of the board of directors(and duties of Non-
executive director s) to shareholders and to society.
• The Paul Ruthman Committee
Modified the cadbury committee and ….stressed on -
extension of directors’ responsibilities to “all relevant control
objectives including business risk assessment and minimizing
the risk of fraud….”
•  
• The Greenbury Committee - -
determining directors’ remuneration -
accountability by the proper allocation of responsibility for
determining directors’ remuneration, -the
proper reporting to shareholders and greater transparency in
the process.

the four sections : Remuneration Committee, Disclosures,

Remuneration Policy and Service Contracts and Compensation.
• d) The Hampel Committee
- to protect investors and preserve and enhance the standing
of companies listed on the London Stock Exchange.

i) The auditors should report on internal control privately to the

directors.
ii) The directors maintain and review all controls.
iii) Companies should time to time review their need for internal
audit function and control.
e) The Combined Code The combined code
= Hampel Committee’ +Cadbury Report + Greenbury Report.
-the boards should maintain a sound system of internal control to
safeguard shareholder’s investments and the company’s assets.
–TRANSPARENCY AND DISCLOSURE TO SHAREHOLDER
• f) The Turnbull Committee -provided guidance
to assist companies in implementing the requirements of the
Combined Code relating to internal control.
• Insist on internal audit annually.
• World Bank on Corporate Governance focuses on
the principles such as transparency, accountability, fairness
and responsibility
. Corporate governance is concerned with holding the balance
between economic and social goals and between individual and
communal goals.
• =Principle of Corporate Governance
• Rights and equitable treatment of shareholders: 
• Interests of other stakeholders: 
• Role and responsibilities of the board:
• Integrity and ethical behavior: 
• Disclosure and transparency: