Corporate governance initiatives in India aim to establish an effective legislative framework through various reforms. The key initiatives include passing a new Companies Act to promote good governance practices and a disclosure-based regime, amending acts governing professional institutes to strengthen transparency and disciplinary mechanisms, and issuing accounting standards in line with international reporting standards. The Securities and Exchange Board of India also introduced Clause 49 to address issues like appointment of independent directors, audit committees, related party transactions, and CEO/CFO certifications. Beyond corporate governance, the government renamed the ministry to Corporate Affairs and introduced initiatives like the Limited Liability Partnership form and the Investor Education and Protection Fund to empower investors. The National Foundation for Corporate Governance was also established through partnerships to

1. Corporate Governance Initiatives in India

2. Effective Corporate Governance
Framework
Need for effective framework
• Globalisation, spate of M&As, jurisdictions
loosing importance – need for common
language- CG;language- CG;
• For corporate sector – competition, capital,
talent & technology – CG;
• Responsibility of Government & Regulators to
provide effective legal structure – Indian scene –
MCA, SEBI, RBI & IRDA

3. Redefining the legislative
framework
Initiatives
• New Companies Act – inducing good CG practices through self
regulation, responsive legal framework based on shareholders’
democracy; disclosure based regime; rational penal provisions with
built-in deterrence and effective protection
• Amendments to the Acts governing three professional institutes
(ICAI/ICSI/ICWAI) with a view to strengthen the disciplinary(ICAI/ICSI/ICWAI) with a view to strengthen the disciplinary
mechanism and bring transparency in their working.
• Notification of Accounting Standards with a view to bring the
disclosure norms in tune with the international reporting standards;
• SEBI – Clause 49 – Appointment of IDs, Audit committee, Code of
conduct, disclosures of related party transactions, remunerations,
compliance of accounting standards, certifications of CEO & CFO,
Compliance Certification & Whistle-blower policy (optional);

4. Initiatives beyond CG…
• The Government has renamed the Ministry from
“Company Affairs” to “Corporate Affairs” – with a
new vision
“We resolve ourselves to be the leader and
partner in initiative for Corporate Reforms,partner in initiative for Corporate Reforms,
Good-Governance and Enlightened Regulation,
with a view to promote and facilitate effective
corporate functioning and investor protection.”
• Introduction of LLPs; transformation in the
service delivery mechanism for transparency
and certainty – low-cost, easy compliance;

5. Other initiatives
• Setting up of Investor Education and Protection
Fund
• Empowering investors through the medium of
education and information with the help ofeducation and information with the help of
investor associations, VOs, NGOs, etc.;
• Launching of websites – www.investorhelpline.in
and www.watchoutinvestors.com ;
• Setting up of NFCG in partnership with
stakeholders – CII, ICAI & ICSI;

6. Major initiatives under NFCG
• Foundation has launched a website of NFCG for
dissemination of policies for better corporate
governance;
• Various orientation programmes for Directors through
Centres of Excellence, seminars and conferences to
propagate the need for following good corporatepropagate the need for following good corporate
governance practices are being organised;
• Constituted core groups on CG norms for IDs and for
Institutional Investors (as a sequel to World Bank ROSC
study) and their reports have also been received;
• Constituted core groups on Corporate Social
Responsibility and for SMEs.