Corporate Governance

Submitted to
Prof-Shweta Rode

Prepared By
Sachin Mishra 72 Shrikant GosaviGaurish Chaulkar-51 Haaris Baraskar-49 Ratnesh Waghmare-80

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Governance Concept in Ramayana

To provide the maximum happiness for the maximum number of people for the maximum

period, based on the principles of Dharma

righteousness and moral values.

- Ayodhya Kand

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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. -The Institute of Company Secretaries of India

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Corporate governance is a set of system and process to ensure that a company is managed to suit the best interest of all stakeholders The stakeholders may be promoters, members, workmen, executives, shareholders, customers, lenders, vendors, bankers, community government and regulator
It is a system of making management accountable to the stakeholders
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Driving Forces of CG in India

1)

Unethical Business Practices

Security Scams Unfair trade practics Misdeed of Companies Plantation, Sheep rearing, etc.

2)

Impact of Globalization
Integration with Foreign Market Foreign Investors expectations New Business Opportunities --- IT & ITES, BPO etc., New Capital formation FII, FDI

3)

Impact of Privatisation
New structure of ownership Multinational Companies

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The principle objective of good corporate governance is to enhance the value of shareholder. Corporate governance focuses on:

1. Building a structure and rules to govern a company board of director. 2. Creating independent audit committees made up of enterprise's board members 3. Ensuring disclosures of all relevant information to shareholders and creditors, including business risk analyses and

4. Controlling management
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Corporate Governance and Ethical Behavior

Business ethics are moral principles

Ethics refer to the code of conduct that guides the individual while dealing in the situation.
It relates to the social rules that influence people to be honest in dealing with other people.

It is important to serve the interests of multiple stakeholder groups

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Objectives of corporate governance

High standards of business ethics Right balance, knowledge and competence Information

Decision making process

Reputation of the corporation
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Principles of good corporate governance

Equitable treatment of stakeholders Transparency Rewards Vision

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Cont

Rights of company owners Responsibility Accountability

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Business Ethics
The value of what should be done and what should not be done from the business point of view.

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Ethical issues for business

Product safety standards Advertising contents Working environment Unauthorized payments Employees privacy Environmental issues

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Corporate Governance with Business ethics

Corporate governance is the function of a companys compliance with regulatory requirements and, to the extent that it is not required by law, its adherence to standards that

define relationships between a companys management, its board, shareholders and other stakeholders provide a structure through which the companys objectives are set, and how they are achieved and monitored recognize the value of business ethics and corporate awareness of society interests to reputation and long-term success

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Relationship
Business ethics and corporate governance are two significant factors that impact a company and how it operates. Business ethics represent the values, principles or characteristics that a company follows when conducting business in the economy. Corporate governance is the internal framework that a company designs and implements to govern and protect those invested into the company. The relationship between ethics and governance comes from an organizations owner or executive managers, who create the governance and decide which ethical principles employees will follow

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The relationship between Law and Ethics

The law is an expression of the ethical beliefs of our society The law cannot codify requirements. therefore an action might be unethical yet not necessarily illegal Similarly, just because an act is illegal does not necessarily mean it is immoral

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How ethics can make corporate Goverance more meaningful

Corporate governance is meant to run companies ethically in a manner such that all stakeholders Good corporate governance should look at all stakeholders and not just shareholders along Corporate governance is not something which regulators have to impose on a management, it should come from within. There is no point in making statutory provisions for enforcing ethical conduct

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The elements of corporate governance, inter-relationship between business ethics and corporate governance with reference to some of the Indian companies

Dr. Reddy's Lab The Mastek HDFC

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CONCLUSIONS
We need to do is to apply the principles of good governance to the whole corporation. This could be described as: "looking at Management through Corporate Governance-tinted glasses" i.e. taking a fresh look at management structure taking into account all interested parties and ensuring all the necessary monitoring and controls are in place to ensure that shareholder value is always at the forefront.

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CONCLUSIONS
"Effective corporate governance ensures that long-term strategic objectives and plans are established, and that the proper management and management structure are in place to achieve those objectives, while at the same time making sure that the structure functions to maintain the corporations integrity, reputation, and accountability to its relevant constituencies."

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