Made by:Gaurav Moorjani

Corporate Governance
Root of the word governance is from gubernate which

means to steer Steer an organization in the desired direction Concerned with intrinsic nature, integrity and identify of an organization

Definition of C.G
There is no universal definition of corporate

governance. In the narrowest, Noble laureate Friedman defined corporate governance as the conduct of the business in accordance with shareholders desires, which generally is to make as much as money as possible, while confirming to the basic rules of the society embodied in law and local customs

Objectives
A properly structured board
The board should be balanced Adopts transparent procedures

Effective machinery to sub serve the concerns of the

stakeholders Keeps the shareholders informed Regularly monitors the functioning of the management Effective control

Elements

Role and powers of board Legislation Management environment Board skills Board appointments Board induction and training Board independence Board meetings Code of conduct Strategy setting Business and community obligations Financial and operational reporting Monitoring the board performance Audit committees

Role and powers of board

Good governance is decisively the manifestation of

personal beliefs and values which configure the organizational values Every board member is accountable Role of the board should be clearly documented in a charter

Legislation
Clear and unambiguous legislation and regulations

are fundamental to effective corporate governance. It is done on day- day basis

Management environment
Setting up of clear objectives
Appropriate ethical framework Establishing due processes

Establishing performance evaluation measures

Board skills
The board must posses certain amount of skills to

function effectively and efficiently Mix of following skills, knowledge and experience:1. Operational or technical expertise 2. Financial skills 3. Legal skills 4. Knowledge of government and regulatory requirement

Board appointments
Ensure that the people which are appointed are

through extensive research It should be a well defined procedure Should satisfy all statutory and administrative requirements

Board induction and training

Must have broad understanding of the area of

operation of the companys business Attendance at continuing education and professional development programmes is essential

Board independence
Independent board is essential for sound corporate

governance Goal may be achieved associating independent directors with the board With independent directors involved they would ensure there is no conflict of interest

Board meetings
Directors must devote sufficient time and give due

attention to meet their obligations Attending and preparing for the board meeting increases the quality interaction Enables to discharge their responsibilities

Code of conduct
Ethical practices and code of conduct are

communicated to all stakeholders and are clearly understood and followed by each member of the organization

Strategy setting
The objectives which are set must be clearly

documented in a long term corporate strategy including an annual business plan together

Business and community obligations

It should take care of communitys obligations
Commercial and service obligations should be clearly

documented The stakeholders must be informed about the proposed and on going initiatives must be taken

Financial and operational reporting

Clearly defined performance measures (financial and

non financial should be prescribed which would add to the affiance and effectiveness) Reports presented must be comprehensive but not so extensive and detailed as to hamper comprehension of the key issues

Monitoring the board performance

The board must monitor and evaluate its combined

performance and also that of individual directors at the periodic intervals

Audit committees
It is an inter alia responsible for liaison with the

management; internal and statutory auditors, reviewing the adequacy of internal control and compliance with significant policies and procedures