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The governance structure specifies the distribution of rights and responsibilities among
different participants in the corporation (such as the board of directors, managers,
shareholders, creditors, auditors, regulators, and other stakeholders) and specifies the rules
and procedures for making decisions in corporate affairs.
PRINCIPLES OF CORPORATE GOVERNANCE: The Cadbury Report (UK, 1992), the
Principles of Corporate Governance (OECD, 1998 and 2004), the Sarbanes-Oxley Act of
2002 (US, 2002) has specified following principles;
Rights and equitable treatment of shareholders
Independence of directors
Duties and remuneration of board and directors
Role of audit committee and auditors.
Appointments and powers of independent directors.
In December 2009, Ministry of Corporate Affairs specified Voluntary
Guidelines on Corporate Governance. These guidelines provide for a set of
good practices, which will 8help the companies to strengthen their internal
governance processes and may be voluntarily adopted by the Indian Public
companies.
In March 2012, Ministry of Corporate Affairs constituted a committee under
the Chairmanship of Mr. Adi Godrej, Chairman, Godrej Industries Limited,
to formulate policy document on Corporate Governance. In September, 2012
the Committee submitted its document, specifying seventeen guiding
principles on corporate governance.
The Companies bill waiting to become companies act 2013, mandates the
novel CORPORATE SOCIAL RESPONSIBILITY principle. This would
enhance the corporate governance.
ISSUES IN CORPORATE GOVERNANCE:
1. Green Initiatives in the Corporate Governance: The Ministry of corporate affairs has
allowed paperless compliance by the companies and Registrar of Companies under the
provisions of the Companies Act, 1956.
2. Simplification in Procedures and Process under Companies Act, 1956
3. e-Payments in the Ministry: The payment of filing fee by the companies has been
made completely online
4. adoption of International Financial Reporting Standards (IFRS)
5. Investor awareness programmes
6. The Companies Bill, 2012
7. Reorganisation of field offices.
8. Easy Exit Scheme, 2011
9. Setting up of Indian Institute of Corporate Affairs (IICA)
10. Limited Liability Partnership Act
11. National Company Law Tribunal (NCLT)
12. New Bills on Multi State Societies and Multi State Partnerships
13. Various orientation programmes for Directors through Centres of Excellence, seminars
and conferences to propagate propagate the need for following following good corporate
corporate governance practices are being organized.
14. Setting up of NFCG in partnership with stakeholders – CII, ICAI, ICSI & FICCI.
15. Setting up of Investor Education and Protection Fund.
16. Amendments to the Acts governing three professional institutes(ICAI/ICSI/ICWAI)
(ICAI/ICSI/ICWAI) with a view to strengthen strengthen the disciplinary disciplinary
mechanism and bring transparency in their working.
17. Empowering SEBI under the SEBI – Clause 49 for greater regulation and monitoring of
companies
18. Mandatory corporate social responsibility (CSR) under the companies act 2013.
BIBLIOGRAPHY
http://www.sebi.gov.in/cms/sebi_data/attachdocs/1357290354602.pdf
http://psrcentre.org/images/extraimages/312018.pdf
Wikipedia
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