This document discusses corporate governance in India and regulations from the Securities and Exchange Board of India (SEBI). It begins with introducing corporate governance and defining it. It then discusses the development of corporate governance norms and practices in India. It outlines SEBI's role in establishing rules and regulations for corporate governance, particularly Clause 49, for publicly listed companies. Clause 49 focused on increasing board independence and transparency around financial disclosures, related party transactions, and internal controls. The document concludes that as Indian companies compete globally, strong corporate governance aligned with international standards has become increasingly important.
Understanding the concept of Corporate governanceHumsi Singh
The presentation gives you an overview of what is corporate governance, its issues, relevance, scope, importance and benefits in today's scenario. This presentation aims to clarify the concept of the views to know the fundamentals of corporate governance and its role in today's market-oriented world.
Youtube Video Link -
https://youtu.be/dx28fuD_D4w
Stewardship Theory, developed by Donaldson and Davis focuses on understanding the existing relationships between ownership and management of the company.
Under Stewardship theory managers are considered as Stewards which means someone who is responsible to protect and act in the best interest of shareholders.
It is opposite to agency theory which mentions the conflict of interest between managers and shareholders.
Managers are considered as committed to business, responsible, working towards accomplishment of mission and vision of organization.
They are the one who brings out collectivism in organization and align everyone’s objective for the growth of business.
Focuses on recognizing various groups in organization and empowers them with motivation and delegation of work.
Balances all stakeholders and add significant value to organization reputation.
There exist a strong relationship between managers and success of the company.
Stewards tries to maximize shareholders wealth by constantly increasing profitability and efficiency of business.
More control and restrictions over managers may lower their motivation and hence turn them out unproductive since they take most of the strategic decisions for growth of business in long run.
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This presentation provide an overview of the role of the Indian Constitution in business environment. It explains the implications of the preamble, the fundamental rights & directive principles of state policy. It also presents information about the constitutional provisions related to business and their economic importance.
Understanding the concept of Corporate governanceHumsi Singh
The presentation gives you an overview of what is corporate governance, its issues, relevance, scope, importance and benefits in today's scenario. This presentation aims to clarify the concept of the views to know the fundamentals of corporate governance and its role in today's market-oriented world.
Youtube Video Link -
https://youtu.be/dx28fuD_D4w
Stewardship Theory, developed by Donaldson and Davis focuses on understanding the existing relationships between ownership and management of the company.
Under Stewardship theory managers are considered as Stewards which means someone who is responsible to protect and act in the best interest of shareholders.
It is opposite to agency theory which mentions the conflict of interest between managers and shareholders.
Managers are considered as committed to business, responsible, working towards accomplishment of mission and vision of organization.
They are the one who brings out collectivism in organization and align everyone’s objective for the growth of business.
Focuses on recognizing various groups in organization and empowers them with motivation and delegation of work.
Balances all stakeholders and add significant value to organization reputation.
There exist a strong relationship between managers and success of the company.
Stewards tries to maximize shareholders wealth by constantly increasing profitability and efficiency of business.
More control and restrictions over managers may lower their motivation and hence turn them out unproductive since they take most of the strategic decisions for growth of business in long run.
Thank you for Watching
Subscribe to DevTech Finance
This presentation provide an overview of the role of the Indian Constitution in business environment. It explains the implications of the preamble, the fundamental rights & directive principles of state policy. It also presents information about the constitutional provisions related to business and their economic importance.
corporate goverance Gobal models.
There are 4 Models.
ANGLO-US Model.
Japanese German model.
China Model.
Indian Model.
Salient ideas and thoughts on principals of governance as revealed by our ancient scriptures.
Basic values of Indian principals of governance.
India is not a story from Rags to Riches.
Strengths of India
The magic mantra of ‘Demographic Dividend’
The Integral Approach .
Domestic Consumption drives growth.
Competition Law awareness and enforcement are increasing day by day. Long-term, sustainable growth of big organization, corporation and companies warrants attention to competition law while strategising their growth.
Corporate Social Responsibility (CSR). It's goals, dimensions and benefits. 3 types of CSR - Ethical, Altruistic and Strategic. Socially Responsible Advertising. Innovative Social Cause Marketing Campaigns. Some Notable Cases of Corporate Social Irresponsibility. Some Responsible Corporations.
Corporate Governance under the Provisions of the Companies Act, 2013ijtsrd
Corporate Governance is the set of policies that are created for deciding a companys performance and direction. It is an overview of rules and regulations for the executives of an incorporated firm. They are the ones who agree to take responsibility towards the shareholders. Corporate governance is a broad term in todays business environment. Corporate governance has become a widely-discussed subject and a very important consideration for investors around the world. Investors and governments have started demanding better governance practices from all companies particularly after the wide publicity over corporate scandals such as Enron, Parmalat, Xerox, World Com, Satyam and many others during early parts of this century. The legal outfits of corporate governance can be customized to fit the meticulous choice of each wearer. The paper will discuss the corporate governance under Companies Act, 2013 in theoretical perspective. In addition, it will explain why it is important for any country to follow good corporate governance practices. It discusses on Board composition and Independence, Committees, Disclosures by Directors, Code of Conduct, Role of Independent Directors, Auditors, Duties of Board of Directors, Related Party Transactions, Disclosures in Annual Report, Corporate Social Responsibility etc. The paper gives overall view of the Corporate Governance requirements under Companies act, 2013. CS S Raja Babu"Corporate Governance under the Provisions of the Companies Act, 2013" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-2 | Issue-1 , December 2017, URL: http://www.ijtsrd.com/papers/ijtsrd5972.pdf http://www.ijtsrd.com/management/law-and-management/5972/corporate-governance-under-the-provisions-of--the-companies-act-2013/cs-s-raja-babu
REVISED CORPORATE GOVERNANCE NORMS RECOMMENDED BY SEBI IN ITS BOARD MEETING HELD ON 13th FEB., 2014.
THESE NORMS WOULD BE APPLICABLE FROM 1st OCT. 2014
corporate goverance Gobal models.
There are 4 Models.
ANGLO-US Model.
Japanese German model.
China Model.
Indian Model.
Salient ideas and thoughts on principals of governance as revealed by our ancient scriptures.
Basic values of Indian principals of governance.
India is not a story from Rags to Riches.
Strengths of India
The magic mantra of ‘Demographic Dividend’
The Integral Approach .
Domestic Consumption drives growth.
Competition Law awareness and enforcement are increasing day by day. Long-term, sustainable growth of big organization, corporation and companies warrants attention to competition law while strategising their growth.
Corporate Social Responsibility (CSR). It's goals, dimensions and benefits. 3 types of CSR - Ethical, Altruistic and Strategic. Socially Responsible Advertising. Innovative Social Cause Marketing Campaigns. Some Notable Cases of Corporate Social Irresponsibility. Some Responsible Corporations.
Corporate Governance under the Provisions of the Companies Act, 2013ijtsrd
Corporate Governance is the set of policies that are created for deciding a companys performance and direction. It is an overview of rules and regulations for the executives of an incorporated firm. They are the ones who agree to take responsibility towards the shareholders. Corporate governance is a broad term in todays business environment. Corporate governance has become a widely-discussed subject and a very important consideration for investors around the world. Investors and governments have started demanding better governance practices from all companies particularly after the wide publicity over corporate scandals such as Enron, Parmalat, Xerox, World Com, Satyam and many others during early parts of this century. The legal outfits of corporate governance can be customized to fit the meticulous choice of each wearer. The paper will discuss the corporate governance under Companies Act, 2013 in theoretical perspective. In addition, it will explain why it is important for any country to follow good corporate governance practices. It discusses on Board composition and Independence, Committees, Disclosures by Directors, Code of Conduct, Role of Independent Directors, Auditors, Duties of Board of Directors, Related Party Transactions, Disclosures in Annual Report, Corporate Social Responsibility etc. The paper gives overall view of the Corporate Governance requirements under Companies act, 2013. CS S Raja Babu"Corporate Governance under the Provisions of the Companies Act, 2013" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-2 | Issue-1 , December 2017, URL: http://www.ijtsrd.com/papers/ijtsrd5972.pdf http://www.ijtsrd.com/management/law-and-management/5972/corporate-governance-under-the-provisions-of--the-companies-act-2013/cs-s-raja-babu
REVISED CORPORATE GOVERNANCE NORMS RECOMMENDED BY SEBI IN ITS BOARD MEETING HELD ON 13th FEB., 2014.
THESE NORMS WOULD BE APPLICABLE FROM 1st OCT. 2014
CLAUSE 35B & 49 OF LISTING AGREEMENT OF SEBI ANAND KANKANI
SEBI HAS AMENDED THE CLAUSE 35B & 49 OF THE LISTING AGREEMENT FOR THE LISTED COMPANIES.
CLAUSE 35B HAS MANDATED THE E-VOTING FOR PASSING THE RESOLUTION
CLAUSE 49 DEALS WITH THE CORPORATE GOVERNANCE.
Notes of Module 5 Corporate Governance
Content
Concept of Corporate Governance
Corporate Governance in India
Objective of Corporate Governance
Features of Corporate Governance
Elements of Corporate Governance
Importance of Corporate Governance
Important Issues in Corporate Governance
Corporate Governance and Agency Theory
Reforming Board of Directors
*Birla Committee
*Naresh Candra Committee
*Narayana Murthy Committee
Bibliography
www.google.com
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Corporate Governance is one of the important criteria for foreign institutional investors to decide on which company to invest in. The corporate practices in India emphasize the functions of audit and finances that have legal, moral and ethical implications for the business and its impact on the shareholders
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It consists meaning of corporate governance, clause 49 of listing agreement, initiatives for governing practices in India and drivers for the growth of corporate governance in India.
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Ppt
1. PRESENTATION TOPIC
Corporate Governance In India & Sebi Regulations
by
Sarath nair(14)
Shivani patel(26)
dipti thakkar(34)
1
2. INdex
• Corporate Governance
• Corporate Governance Norms
• Corporate Governance In India
• Securities Exchange Board Of India
• SEBI Clause For Corporate Governance In India
2
3. Introduction
The last few years have seen some major scams and corporate
collapse across the globe.
In India, the major example is Satyam which is one of the largest IT
companies in India.
All these events have caused the pendulum of public faith to shift
away from free market to a more closely regulated one.
However "corporate governance,― in spite of being the new object of
interest and inquisitiveness from various quarters, remains an
ambiguous and often misunderstood phrase.
So before delving further on the subject it is important to define the
concept ofcorporate governanceIntroduction 3
4. Corporate governance …
And economic development are intrinsically linked.
Effective corporate governance systems promote the development of
strong financial systems-irrespective of whether they are largely
bank-based or market-based –which,
in turn, have an unmistakably positive effect on economic growth
and poverty reduction.
4
5. Corporate governance is….
•A means whereby society can be sure that large corporations are
well-run institutions to which investors and lenders can confidently
commit their funds.
•Is a term that refers broadly to the rules, processes, or laws by which
businesses are operated, regulated, and controlled. The term can refer
to internal factors defined by the officers, stockholders or constitution
of a corporation, as well as to external forces such as customergroups,
clients and government regulations.
•(Creates)..safeguards against corruption and mismanagement, while
promoting fundamental values of a market economy in democratic
society.
•(Considering the ethical failures in the last several years and the
resulting crisis in confidence)..A sincere commitment to creating and
sustaining an ethical business culture in public and private
sectors..(has never been so important).
5
6. Corporate governance norms
Corporate governance are the policies, procedures and rules
governing the relationships between the
shareholders, (stakeholders), directors and managers in a company, as
defined by the applicable laws, the corporate charter, the company’s
bylaws, and formal policies.
Primarily it is about managing top management, building in checks
and balances to ensure that the senior executives pursue strategies that
are in accordance with the corporate mission. Itconsists of a set of
processes, customs, policies, laws and institutions affecting the way of a
corporation is directed, administered or controlled. Corporate
governance governs the relationship among the many players involved
(the stakeholders) and the goals for which the corporation is governed.
6
7. Corporate governance in India
•The Indian corporate scenario was more or less stagnant till the early
90s.
•The position and goals of of the Indian corporate sector has changed a
lot after the liberalisation of 90s.
•India’s economic reform programmemade a steady progress in 1994.
•India with its 20 million shareholders, is one of the largest emerging
markets in terms of the market capitalisation.
7
8. Corporate governance of India has undergone a paradigm shift
•In 1996, Confederation of Indian Industry (CII), took a special initiative
on Corporate Governance.
•The objective was to develop and promote a code for corporate
governance to be adopted and followed by Indian companies, be these in
the Private Sector, the Public Sector, Banks or Financial Institutions, all
of which are corporate entities.
•This initiative by CII flowed from public concerns regarding the
protection of investor interest, especially the small investor, the
promotion of transparency within business and industry
8
9. Securities and Exchange Board of India
The Government of India's securities watchdog, the Securities Board
of India, announced strict corporate governance norms for publicly
listed companies in India.
The Indian Economy was liberalised in 1991. In order to achieve the
full potential of liberalisation and enable the Indian Stock Market to
attract huge investments from foreign institutional investors (FIIs), it was
necessary to introduce a series of stock market reforms.
SEBI, established in 1988 and became a fully autonomous body by
the year 1992 with defined responsibilities to cover both development
and regulation of the market.
9
10. SEBI
•On April 12, 1988, the Securities and Exchange Board of India
(SEBI)was established with a dual objective of protecting the rights of
small investors and regulating and developing the stock markets in
India.
•In 1992, the Bombay Stock Exchange (BSE),the leading stock
exchange in India, witnessed the first major scam masterminded by
Harshad Mehta.
•Analysts unanimously felt that if more powers had been given to
SEBI,
the scam would not have happened.
•As a result the Government of India (GoI) brought in a separate
legislation by the name of ‘SEBI Act 1992’and conferred statutory
powers to it.
•Since then, SEBI had introduced several stock market reforms. These
reforms significantly transformed the face of Indian Stock Markets
10
11. SEBI and Clause 49
•SEBI asked Indian firms above a certain size to implement Clause 49, a
regulation that strengthens the role of independent directors serving on
corporate boards.
•On August 26, 2003, SEBI announced an amended Clause 49 of the
listing agreement which every public company listed on an Indian stock
exchange is required to sign. The amended clauses come into immediate
effect for companies seeking a new listing.
11
12. The major changes to Clause 49…
1.Independent Directors —1/3 to ½depending whether the chairman of
the board is a non-executive or executive position.
2.Non-Executive Directors ----The total term of office of non-executive
directors is now limited to three terms of three yearseach.
3.Board of Directors-----The board is required to frame a code of
conduct for all board members and senior management and each of them
have to annually affirm compliance with the code.
4.Audit Committee----Financial statements and the draft auditreport
/reports of management discussion and analysis of financial condition
and result of operations/reports of compliance with laws and risk
management/management letters and letters of weaknesses in internal
controlsissued bystatutory and internal auditors/appointment, removal
and terms of remuneration of the chief internal auditor 12
13. Clause 49..
5.Whistleblower Policy ----This policy has to be communicated to all
employees and whistleblowers should be protected from unfair treatment
and termination.
6.Subsidiary Companies-----50% non-executive directors & 1/3 &
½independent directors depending on whether the chairman is non-
executive or executive.
7.Disclosures----Contingent liabilities./Basis of related party
transactions./Risk management/ . Proceeds from initial public offering/ .
Remuneration of directors.
8.Certifications----reviewed the necessary financial statements and
directors’report; established and maintained internal controls,
disclosed to the auditors andinformedthe auditors and audit committee of
any significant changes in internal control and/or of accounting policies
during the year. 13
14. Conclusion
As Indian companies compete globally for access to capital
markets, many are finding that the ability to benchmark against world-
class organizations is essential. For a long time, India was a
managed, protected economy with the corporate sector operating in an
insular fashion. But as restrictions have eased, Indian corporations are
emerging on the world stage and discovering that the old ways of doing
business are no longer sufficient in such a fast-paced global
environment.
14