1. Presented by- Deepak khandelwal

4. The word has Latin origins that suggest the notion of “steering". it deals with the processes and systems by which an organization or society operates.

5. Governance can be used with reference to all kind of organizational structure e.g.

6. Ngo –not for profit organization

7. Municipal corporation /gram panchyat

8. Central/state government

10. The Cadbury committee report defines it as “the system by which companies are directed and controlled”.

12. Brief history of corporate governance in India Unlike South-East and East Asia, the corporate governance initiative in India was not triggered by any serious nationwide financial, banking and economic collapse The initiative in India was initially driven by an industry association, the Confederation of Indian Industry In December 1995, CII set up a task force to design a voluntary code of corporate governance. The final draft of this code was widely circulated in 1997. In April 1998, the code was released. It was called Desirable Corporate Governance: A Code. Between 1998 and 2000, over 25 leading companies voluntarily followed the code: Bajaj Auto, Hindalco, Infosys, Dr. Reddy’s Laboratories, Nicholas Piramal, Bharat Forge, BSES, HDFC, ICICI and many others

13. Brief history of corporate governance in India Following CII’s initiative, the Securities and Exchange Board of India (SEBI) set up a committee under Kumar Mangalam Birla to design a mandatory-cum-recommendatory code for listed companies The Birla Committee Report was approved by SEBI in December 2000 Became mandatory for listed companies through the listing agreement, and implemented according to a rollout plan: 2000-01: All Group A companies of the BSE or those in the S&P CNX Nifty index… 80% of market cap. 2001-02: All companies with paid-up capital of Rs.100 million or more or net worth of Rs.250 million or more. 2002-03: All companies with paid-up capital of Rs.30 million or more

14. Brief history of corporate governance in India Following CII and SEBI, the Department of Company Affairs (DCA) modified the Companies Act, 1956 to incorporate specific corporate governance provisions regarding independent directors and audit committees. In 2001-02, certain accounting standards were modified to further improve financial disclosures. These were: Disclosure of related party transactions. Disclosure of segment income: revenues, profits and capital employed. Deferred tax liabilities or assets. Consolidation of accounts. Initiatives are being taken to (i) account for ESOPs, (ii) further increase disclosures, and (iii) put in place systems that can further strengthen auditors’ independence.

16. Audit committee

17. Internal audit

18. Statutory audit

19. Disclosure of information

20. Risk management framework

22. Balance skills, experience and independence on the board appropriate to the nature and extent of company operations.

23. Establish a code to ensure integrity.

24. Safeguard the integrity of company reporting.

25. Risk management and internal control.

26. Disclosure of all relevant and material matters.

28. Managers

29. Workers

30. Shareholders or owners

31. Regulators

32. Customers

33. Suppliers

35. There should be board balance of executive & non executive directors such that no individual can dominate the board decision making.

36. The board should be supplied with timely information to enable it to discharge its duties.

37. There should be formal and transparent procedure for the appointment of new directors to the board.

39. Ability of the board

40. Adequacy of the process

41. Commitment level of individual board members

42. Quality of corporate reporting

44. Written job descriptions detailing roles and responsibilities of chairman and board members.

45. Core competencies for board members are defined and those without skills or expertise not invited.

46. Development of performance criteria and annual evaluations of the board.

47. Orientation for new members.

48. Ongoing training

50. Management selection, supervision and upgrading.

51. Maintenance of good member relations.

52. Protecting and optimizing the organization’s assets.

54. Accountability Clarifying governance roles & responsibilities, and supporting voluntary efforts to ensure the alignment of managerial and shareholder interests and monitoring by the board of directors capable of objectivity and sound judgment. Transparency Requiring timely disclosure of adequate information concerning corporate financial performance

55. Responsibility Ensuring that corporations comply with relevant laws and regulations that reflect the society’s values Fairness Ensuring the protection of shareholders’ rights and the enforceability of contracts with service/resource providers

56. Corporate Governance Investors are Willing to Pay More For a Company With Good Board Governance Practices 83 81 89 Companies are willing to pay 18 % to 28% more for better governance.

57. ICSI National Award for Excellence in Corporate Governance Best Governed Companies

59. Stringent enforcement of Law

60. More effective coordination and cooperation between SEBI, DCA

61. CG mechanism should be flexible and suitable

62. Overall ethical values in all segments should be promoted for effective

64. Quarterly results of company and its business segments.

65. Minutes of the audit committee and other board committees.

66. Recruitment and remuneration of senior officers.

67. Materially important legal notices and claims, as well as any accidents, hazards, pollution issues and labor problems.

69. Transactions involving payment towards goodwill, brand equity and intellectual property.

70. Any materially significant sale of business and investments.

71. Foreign currency and other risks and risk management.