This document discusses corporate governance, which refers to the systems and processes by which companies are directed and controlled. Good corporate governance promotes fairness, transparency and accountability. It involves relationships between management, the board of directors, shareholders and other stakeholders. The key goals of corporate governance are to ensure the company is run in the best interests of all stakeholders, prevent conflicts of interest, and increase accountability. Effective corporate governance structures include independent boards that oversee management and keep shareholders informed.

1. GOVERNANCE

2. Corporate Governance may be defined
“as a set of systems, processes and
principles which ensure that a company is
governed in the best interest of all
stakeholders”. It is the system by which
companies are directed and controlled.
It is about promoting corporate
fairness, transparency and
accountability.

3. • It involves a set of relationships between a
company’s management, its board, its
shareholders and other stakeholders;
• It deals with prevention or mitigation of the
conflict of interests of stakeholders.Ways of
mitigating or preventing these conflicts of
interests include the
processes, customs, policies, laws, and
institutions which have impact on the way a
company is controlled.
• An important theme of corporate governance is
the nature and extent of accountability of people in
the business, and mechanisms that try to
decrease the principal–agent problem.

4. • A properly structured board capable of taking
independent and objective decisions is in
place at the helm of affairs;
• The board is balance as regards the
representation of adequate number of non-
executive and independent directors who
will take care of their interests and well-
being of all the stakeholders;
• The board adopts transparent procedures
and practices and arrives at decisions on
the strength of adequate information;

5. • The board has an effective
machinery to subserve the concerns
of stakeholders.
• The board keeps the shareholders
informed of relevant developments
impacting the company;
• The board effectively and regularly
monitors the functioning of the
management team;
• The board remains in effective control of
the affairs of the company at all times.

6. • Enhanced Performance- helps a company
improve overall performance.
 Without corporate governance, a company tends to
be weak and sluggish.
• Access to Capital- The better corporate
governance a company has, the more easily it can
access outside capital that the business can use to
fund its projects.
 Since corporate governance includes major
shareholders, it connects investors with the
business itself, and these investors use their
resources and contacts to support the company

7. • Better Standards- Corporate governance makes
many decisions about business operations, but one of
the most important decisions involves corporate
standards.
 Standards affect the quality of products and the goals
that the business has in technology, customer service,
and marketing.
• Better Talent Utilization- With a strong
corporate governance structure, people can find
positions that utilize their talents more effectively,
and the board of directors and top leaders of the
business are always looking to add more talented
people to their numbers.

8. • Easily Corruptible-Corporate governance needs a certain level of
government oversight to avoid increasing levels of corruption. The lack of
governmental oversight in corporate governance lead to a
misallocation of credit that actually worked against competition.
• Family-Owned Companies- Corporate governance works at
its best when shareholders and board members are able to make objective
decisions that are in the best interest of the company. According to Ibis
Associates, a business planning firm, family-run corporations (founding
family members own controlling share of the company), such as Ford and
Wal Mart, lose objectivity in business making decisions due to the family's
financial investment in the business' performance and the emotional ties
associated with building a worldwide corporation from the ground up.
• Costs of Monitoring- To effectively govern a publicly traded
corporation, shareholders must speak with one voice and have
enough votes to allow that voice to have any real weight. This
requires individuals that have a collective vision for the company to
pour more money into that company to gain a controlling share.

9. • Rights and equitable treatment of shareholders--
Organizations should respect the rights of shareholders
and help shareholders to exercise those rights. They
can help shareholders exercise their rights by openly
and effectively communicating information and by
encouraging shareholders to participate in general
meetings.
• Interests of other stakeholders:- Organizations should
recognize that they have legal, contractual, social, and
market driven obligations to non-shareholder
stakeholders, including employees, investors, creditors,
suppliers, local
communities, customers, and policy makers.

10. • Role and responsibilities of the board:-- The board needs
sufficient relevant skills and understanding to review and
challenge management performance. It also needs adequate
size and appropriate levels of independence and commitment
• Integrity and ethical behavior:- Integrity should be a fundamental
requirement in choosing corporate officers and board members.
Organizations should develop a code of conduct for their
directors and executives that promotes ethical and responsible
decision making.
• Disclosure and transparency:- Organizations should clarify and
make publicly known the roles and responsibilities of board and
management to provide stakeholders with a level of
accountability. They should also implement procedures to
independently verify and safeguard the integrity of the
company's financial reporting. Disclosure of material matters
concerning the organization should be timely and balanced to
ensure that all investors have access to clear, factual
information.

12. • Since corporate governance failures have proved to be
harmful not just for the organizations but also for the
economy and the general public at large as well, there
have been public pressures on the government and
regulatory authorities to reform business practices
and increase transparency.
• Consequently, it hasbecome apart of thegovernment’s
duty to ensure accountability and responsibility in
corporate behavior.
• Effective disposal of this responsibility basically
revolves around two things:
• First, the designing of regulatory commands i.e. the
regulations and laws to ensure good corporate
governance; and
• Second is the enforcement of regulations.

13. • In today’s world, frauds are an undeniable fact ofbusinesslife.
• Affecting all types of businesses. New technologies such as the
Internet, and the development of fully automated accounting systems,
have increased the opportunities for fraud to be committed.
• Once suspected or discovered, investigating fraud is a specialist task
• requiring experience and technical skill and can be very costly. Thus,
there is no doubt
• that fraud is best prevented, rather than dealt with after the fact. The
most effective and appropriate response to the problem of fraud
involves a combination of risk management techniques.
These techniques include:
• Setting up inherent control based upon soft controls that occur
continuously and
• consistently throughout the organization. Such controls should be
embedded in
• normal business practice and be designed in such a way that they are to
a large
• extent self sustaining; and
• Setting up formal control processes of monitoring, reviewing and

14. AT NATIONAL LEVEL :-
•As barriers to the free flow of capital fall, it becomes imperative to recognize
that the quality of corporate governance is relevant to capital formation and
that sound corporate governance principles is the foundation upon which the
trust of investors is built.
•Corporate governance represents the ethical the moral framework under
which business decisions are taken. Thus, any investor, when making
investments across the borders or even otherwise, wants to be sure that not
only are the capital markets or enterprises with which they are investing are
being run competently but they also have good corporate governance.
•Consequently, lack of sound corporate governance practices in any country
can badly affect the confidence of foreign investors, in turn causing damage
to the amount of foreign investments flowing in.

15. •It is self evident that sound corporate governance is essential to the well
being of an
individual company and its stakeholders, particularly its shareholders and
creditors.
•We need only remind ourselves of the many companies, across the
world, whose financial difficulties and,
•ultimate demise have been substantially attributable to weak corporate
governance.
•On the other hand, there are several areas of self-interest that
should drive companies to embrace more effective governance.
These areas are:
1.Effective governance helps to minimize reputational risks and thus,
protecting the brand;
2. It helps to instill trust in customers and vendors;
3.It alsohelpsto assureeffectivenessandintegrity of a company’sbusiness
processes.
4.Further, in many cases, the punishment, in terms of penalties or
imprisonment, for white-collar crimes are now in excess for such criminal
acts such as armed
robbery, assault, and negligent murder. Even to escape such punishments,

16. •Most of the regulations made, such as SOX in US and Clause 49 of
Listing Agreement in India, are applicable only to publicly-registered or
listed companies and private companies are out of the ambit of these
regulations.
• However, today we see that private companies are also becoming big in
size and
impact.
•Very near examples would include joint ventures being organized
as private companies within the insurance industry in India.
•Thus, failure of corporate governance within these private companies
as well can very badly harm the general public at large. And also since
new standards of corporate governance, while only required by law at
public companies, are for forming “bestpractices”in manywill governed
private companies,we stronglyfeel that the applicability of such
regulations, after suitable modifications, be extended to private
companies as well.
•Apart from the necessity as above, it is also in the self-interest of private
companies
to ensure good corporate governance. This is primarily because:-

17. 1.Usually, in most private companies, controls are informal
or even if there are formal controls, they tend to be
detective rather than preventive. This makes private
companies unprotected against
risks, which needs to be mitigated.
2.Good corporate governance increases creditworthiness
of the company and thus, enables it to raise funds at
cheaper cost. Good corporate governance is also a must
for companies that are planning to seek stock exchange
listing and raise money from markets by converting them
into public company.
3.Finally, if the owners of a private company are considering
the sale of all or part of the entity, or are seeking private
equity
financing, effective controls can increase prospective
buyers’ willingness to pay a premium for the

18. • Altough the private sector model view shareholders
as main stakeholders.
• In public sector specific users group those directly
responsible for funding and the community at large
assume great importance as stakeholders.
• Stewardship and accountibility of use of funds and
assets is particularly important in public sector.
• It is becoming more important to focus on corporate
governance in public sector to maintain faith in system and
promote better service to the public sector to maintain faith
in the system and promote better service to the public.

19. •Good institutional governance should
be instilled by the development of
governance systems in ministries and
authorities, with the aim of focusing
on enhancing the quality of public
services consistent with citizen
expectations, promoting compliance
and conformance, with appropriate
transparency and flexibility.

21. Type Public
Traded as
NASDAQ: GOOG
NASDAQ-100 Component
S&P 500 Component
Industry Internet, Computer software
Founded
Menlo Park, California, U.S.
(September 4, 1998 (1998-09-04))[1][2]
Founder(s) Sergey Brin, Larry Page
Headquarters Mountain View, California, United States
Area served Worldwide
Key people
Larry Page
(Co-Founder & CEO)
Eric Schmidt
(Executive Chairman)
Revenue US$ 37.905 billion (2011)
Operating income US$ 11.632 billion (2011)
Profit US$ 09.737 billion (2011)
Total assets US$ 72.574 billion (2011)
Total equity US$ 58.145 billion (2011)
Employees 33,077 (2012)[3]
Subsidiaries
AdMob, DoubleClick, On2 Technologies,

22.  Google’s motto is ‘do not be evil’. They believe these words relate to the way they
serve their users.
 Their code message is that Google strives towards the highest possible standards
of ethical behaviour.
 Following are the seven principles they look at in arriving at their goal:

23. They have flourished by serving the interests of their users. Their goal is to build
products that organize the world’s information and make it available to their users.
Usefulness: products and services to be user friendly and useful to their
customers.
Honesty: they want clear and truthful communication with their customers.
Responsiveness: they want to be responsive to the user feedback about
their and services.
 Action oriented: they want their product and services to their customers to
be useful and in case they are not then, they take
appropriate action to make it useful

24.  They create an ambience in which employee can reach to his
full, potential as follows:
 Employment provides equal opportunity to all employees, without any
discrimination.
 Harassment and discrimination is totally absent from the firm.
 Drugs and alcohol use is not accepted in the firm atall.
 Carrying of weapons and any type of violence by the employees is
strictly not accepted.

25.  Avoidance of conflict of interest is achieved by the following methods:
 Openness and transparency is important to work ethics.
 Personnel investment in the firm’s equity is done only after the approval of the
board of directors.
 Gifts and entertainments are allowed to be accepted as long as these are of low
value and do not impact on the firm’s decisions with regard to those offerings
these gifts or entertainment.

26. The confidential information could be any of the following:
 Financial information, product information and user information, the
information can be given in select cases on a need to know basis only.
 Trademarks, logos and copyrights. The name of Google products and services
and the logos connected to these are the firm’s intellectual property and
unauthorized use could damage their image.
 Google partners should not give or receive any confidential information unless
they have cleared with the firm’s legal department.
 Google wants to give the same respect to competitive information as they
expect their competitors would give theirs
 Google does not want its employees to even discuss confidential information
on the net or anywhere else, unless the person has been specially authorize to
do

27.  Google believes in accuracy in reporting the financial analysis of the firm.
Every member of the Google team has the responsibility of seeing that the
books are maintained accurately. No one should ever try to influence the
auditing of Google’s financial accounts.
 The employees are supposed to co operate with accounting and financial
teams; auditors to ensure that the book are accurately maintained.
 The employees must report any irregularities if they observe them, even the
small problems when they are not as per the firm’s reporting of Financial and
Accounting Concerns Policy.
GOOGLE ASSETS
 It is expected that the employees will take care to conserve the firm’s assets
and equipment. They are provided with all the required tools for the job they
perform.
 The firm’s computers, telephones and other communication equipments are
crucial aspects of the firm’s property and these must be looked after well.
 While buying from third parties the employees are to get the best bargains of
the firm. All contracts must be vetted by the firm’s legal department and
signed by only the authorized signatories.

28.  The firm takes the responsibility of complying with the laws of the land and
when in doubt about the interpretation of any law the employees are to get in
touch with the firm’s legal department.
 The firm wants from its employee’s full compliance with the Foreign Corrupt
Practices Act, export control regulations, antitrust laws and other trade
regulation statutes. In case of accepting gifts, any item of value would be
considered as taking a bribe.
 Any violation of antitrust law by the employees would not be accepted.
CODE OF CONDUCT
 The firm believes that it is not possible to be fully comprehensive with regard
to the code of conduct: they want the employees to refer to the legal
department in case of any doubts in any matter of ethics.

29.  At last, it would be appropriate to say that firstly, there is no unique
structure of “corporate governance and secondly, corporate
governance goes far beyond regulation. The quantity,quality and
frequency of financial and managerial disclosure, the extent to which
the board of directors exercise their fiduciary responsibilities towards
shareholders, the quality of information that management share with
their boards and the commitment to run transparent companies cannot
be legislated at any level of detail. Instead, these evolve due to the
catalytic role played by the more progressive elements within the
corporate sector and, thus, enhance corporate transparency and
responsibility.The adoption of governance best practices increases the
likelihood that leadership will provide the desired corporate
performance while confidently trackingS