1. Corporate Governance:
Need For Transparency And Accountability
BY: ANURADHA CHITTARA
WRITE TO ME: anuradhachittara@gmail.com
TWITTER: @chittaranuradha
2. Defining Corporate Governance
Cadbury Committee: Corporate governance concerns to how companies are directed and controlled.
Economists: The corporate governance relies on the standard definition which revolves around the
defense of shareholders interests suggesting separation of ownership and control regarding a 'principal'
on one side and an 'agent' on the other.
Tenets of Corporate Governance
Protection of the rights of shareholders:
The role of stakeholders in corporate governance
Disclosure and transparency
The equitable treatment of shareholders
Responsible board and other responsibilities
4. What are the Strategies adopted by the
Companies?
Few of the strategies adopted by the defrauding companies-
By creation of fictitious assets-Satyam Case
Gross overstatement of earnings-Enron
Misappropriation of funds and Gross misuse of power-Reebok India fraud
Related party transactions
Insider Trading-Apollo Tyre
5. Issues with Corporate Governance:
• A balanced board
• Evaluations of KMP
• Independent Directors
• Removal of Independent Directors-Reasons
• Accountability to stakeholders
• Executive compensation
• Founder’s Control and Planning
• Risk Management
• Protection from possible misuse of data
• E-governance
6. Ethical norms increase the value and
performance of a company by:
Improving strategic thinking,
Independent decision making by a balanced board with impartial, independent
directors on the top to add on to the out of the box ideas.
Monitor the global risk factors more efficiently.
The personnel's at the top management effective manages the operations of the
company and directors without affecting the management decision making sticks
to the agendas restricted to the board.
The most important of all the financial reports are aimed with transparency,
accountability, and fairness towards the stakeholders, etc.
7. Challenges ahead
Increasing the strength the ethical policies and compliance.
E-Governance, acceptance to EDIFR.
Vigilant SEBI
Observance to the NFRA-strict attitude towards accounting faults.
Removal of Independent Directors be made transparent.
Whistle blowers be protection.