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  1. 2. Understanding Corporate Governance Add-On Class by CS. Balakrishnan Bilu
  2. 3. Why Some Companies are Special ? Infosys, Wipro, ONGC etc.
  3. 4. Corporate Governance Is the sweetest fruit of Good Culture, Practice & Procedures
  4. 5. Definition of Corporate Governance "Corporate Governance is the culture of managing a corporate entity. It is an outcome of accountability, transparency, disclosure and social responsibility. It is the adoption of best corporate practices, wherein all the stakeholders are benefited."
  5. 6. Definition of Corporate Governance Corporate Governance is  the   application   of  best management practices, compliance of law  in  true letter and spirit and  adherence to ethical standards   for effective management and distribution of wealth and discharge of social responsibility   for sustainable development of all stakeholders”
  6. 7. National Foundation for Corporate Governance Initiative by Indian Professional Bodies
  7. 8. Who is concerned about good practices ? <ul><li>Shareholders </li></ul><ul><li>Creditors </li></ul><ul><li>Debenture-holders </li></ul><ul><li>Banks & FIs </li></ul><ul><li>Professionals </li></ul><ul><li>Board Members </li></ul><ul><li>Common public </li></ul><ul><li>Other stakeholders </li></ul>
  8. 9. <ul><li>Board members </li></ul><ul><li>Shareholders </li></ul><ul><li>Committee members </li></ul><ul><li>Professionals </li></ul><ul><li>Intermediaries </li></ul><ul><li>Others </li></ul>Who is responsible for good practices ?
  9. 10. ELEMENTS OF CORPORATE GOVERNANCE <ul><li>Disclosure </li></ul><ul><li>Transparency </li></ul><ul><li>Accountability </li></ul><ul><li>Code of conduct </li></ul><ul><li>Values & Ethics </li></ul><ul><li>Social Responsibility (CSR) </li></ul>
  10. 11. CORPORATE GOVERNANCE CODE / BEST PRACTICES REQUIRED IN THE WAKE OF ENRON SCAM <ul><li>SOX Act in 2002 </li></ul><ul><li>Best Practices Code by Most of the Countries </li></ul><ul><li>Committee appointed to study have corporate can be governed </li></ul><ul><li>Manuals / Code of Conduct etc. – the hot topic </li></ul>
  11. 12. CORPORATE GOVERNANCE CODE / BEST PRACTICES - LEGAL REQUIREMENT, INDIAN PERSPECTIVE Kumar Mangalam Birla Committee N R Narayanamurthy Committee Clause 49 inserted in Standard Listing Agreements of the Stock Exchanges After further study, Revised Clause 49
  12. 13. NEW CONCEPTS EMERGED <ul><li>Independent directors </li></ul><ul><li>Importance for Non-Executive directors </li></ul><ul><li>Shareholders’ Grievance Committee </li></ul><ul><li>Remuneration Committee </li></ul><ul><li>CEO Certification </li></ul><ul><li>MD & AR </li></ul><ul><li>Whistle Blower Policy </li></ul><ul><li>Quarterly Reports </li></ul><ul><li>Corp. Governance Compliance Certificate </li></ul>
  13. 14. <ul><li>Every One is racing towards Good Governance. How can we achieve ? </li></ul><ul><li>Legal Compliances </li></ul><ul><li>Values & Ethics </li></ul><ul><li>Code of Conduct </li></ul><ul><li>Board Culture </li></ul><ul><li>Transparent approach </li></ul>
  15. 16. Get ready… Be a part of Building Good Corporate Practices, Before You are caught for Non-Compliance !