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‡ Y

 is adjective meaning ³of or relating to a
corporation´ derived from the noun corporation.
Ł A corporation is an organization created (incorporated) by a
group of shareholders who have ownership of the corporation
Ł The elected Board of directors appoint and oversee management
of the corporation.
‡ Oxford English Dictionary defines ³ 
 
as the act,
manner, fact or function of governing, sway, control.
Ł The word has Latin origins that suggest the notion of 'steering'.
Ł It deals with the processes and systems by which an organization
or society operates.
÷ 

  


½ ÷overnance can be used with reference to all kind of
organizational structure e.g.
½ N÷O (Not for profit organisation)

½ Municipal corporation/ ÷ram panchayat

½ Central/ State ÷overnment
½ Partnership firm
Y
÷ 
‡ It is generally understood as the framework of rules,
relationships, systems and processes within and by
which authority is exercised and controlled in
corporations
‡ A system of checks and balances between the board,
management and investors to produce an efficiently
functioning corporation, ideally geared to produce long-
term value
‡ Fundamental objective of corporate governance is the
enhancement of the long-term shareholder value while
at the same time protecting the interests of other
stakeholders
 ¦ 

Y
÷  

‡ The Manner in which a Corporation is run -

Ł Achieving its Objectives
Ł Transparency of its Operations
Ł Accountability & Reporting
Ł ÷ood Corporate Citizenship
‡ The Processes & Operating Relationships that best
achieve Organizational goals
¦ 

Y
÷ 
‡ Corporate governance is
Ł a relationship among stakeholders that is used to
determine and control the strategic direction and
performance of organizations
Ł concerned with identifying ways to ensure that
strategic decisions are made effectively
Ł used in corporations to establish order between the
firm¶s owners and its top-level managers
Y
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· åautilya¶s (Chanakya) Arthashastra is the oldest book (around 300 B.C) on
Management available to the world
· This masterpiece covered a wide range of topics and also recommended that
Ł the king shall not consult with any advisor who had a vested interest in the
outcome of a particular project
Ł establishment of an ›
 ›   
 *a topic which has received a
great deal of attention now during the past few years after corporate scandals
Ł the    
  
› into one uniform system to prevent
problems in translating financial data between disparate methods of
accounting ± a subject which the international accounting community is
dealing with in terms of the convergence of accounting standards
· In the 
 
 - The East India Company introduced a Court of
Directors, separating ownership and control (U.å., the Netherlands) in 1600s
 À

  Y


 


1. Strengthen management oversight functions and
accountability
2. Balance skills, experience and independence on the board
appropriate to the nature and extent of company operations
3. Establish a code to ensure integrity
4. Safeguard the integrity of company reporting
5. Risk management and internal control
6. Disclosure of all relevant and material matters
7. Recognition and preservation of needs of shareholders
 G
 Y

 



1. Board of Directors
2. Managers
3. Workers
4. Shareholders or Owners
5. Regulators
6. Customers
7. Suppliers
8. Community (people affected by the actions of the
organization)
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‡ In India C÷ requirements have been developed in close
cooperation between the government and the business
community.
‡ The SEBI has appointed influential business leaders to
chair committees such as the å.M. Birla Committee (2000)
and the N.R. Narayana Murthy Committee (2003) and the
Department of Company Affairs commissioned the Naresh
Chandra Committee (2002).
‡ Such high-level corporate involvement has strengthened
the impact value of the recommendations of the
committees.
‡ The basic rationale for high standards of C÷ stems from the
inherent character of the corporate form of organization.
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‡ Asymmetry of power
‡ Asymmetry of information
‡ Interests of shareholders as residual owners
‡ Role of owner management
‡ Theory of separation of powers
‡ Division of corporate pie among stakeholders
 J 
Y  

 
‡ Companies need to invest in good governance
Ł Corporate governance has a direct bearing on
business performance and thereby ROI
Ł Leverage the power of IT
‡ On average, businesses with superior governance
practices generate 20 percent greater profits than
other companies
Ł A study based on 256 companies conducted at the
MIT Sloan School of Management
  


‡ ÷ood governance leads to good performance

‡ It creates an open and transparent system
‡ It improves communication and breaks down
systematic barriers to flow of information
‡ ÷ood governance allows decision making based on
data. It reduces risk
‡ ÷ood governance helps in creating a brand and creates
comfort for all stakeholders and society
 ’
Y

‡ Central to Corporate ÷overnance
Ł Juxtaposed between Shareholders on the one hand, and
on the other, Managers of the Entity
Ł Follows Distancing between Ownership and Control
Ł Trustee for All Shareholders
Ł Loyalty & Commitment ± Always to Company
‡ Provide / Exercise -
Ł Leadership and Strategic ÷uidance
Ł Objective Judgement Independent of Management
Control over the Company
‡ "
ect and Control the Management of the Company
Ł Be Accountable at all times to All Shareholders
u    
  
‡ Direction involves
Ł Formulation & Review of Company Policies, Strategies,
Budgets and Plans, Risk Management Policies, Top Level
HR Policies, etc
Ł Setting Objectives & Monitoring Performance
Ł Oversight of Acquisitions, Divestitures, Projects,
Financial and Legal Compliance, etc
‡ Control involves
Ł Prescribing Codes of Conduct, Overseeing Disclosure &
Communication Processes, Ensuring Control Systems to
Protect Company Assets
Ł Reviewing Performance & Realigning Action Initiatives
to Achieve Company Objectives
u    
  
‡ Accountability involves
Ł Creating, Protecting and Enhancing Company Wealth
and Resources
Ł Timely and Transparent Reporting
Ł ÷ood Corporate Citizenry including Discharge of
Stakeholder Obligations and Societal Responsibilities
without Compromising the Shareholder Wealth
Maximization ÷oal
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‡ An expanded baseline for measuring performance, adding
social and environmental dimensions to the traditional
monetary benchmark
‡ Captures an expanded spectrum of values and criteria for
measuring organizational (and societal) success:
economic, ecological and social
‡ Financial, social, and environmental effects of a firm's
policies and actions that determine its viability as a
sustainable organization
‡ People, planet and profit" succinctly describes the triple
bottom lines and the goal of sustainability

’


‡ Increased revenue / market share
‡ Increased employee retention
‡ Increased community support
‡ Reduced risk
‡ Positive public relations
‡ Reduced costs - reduced manufacturing expenses,
reduced expenses at commercial sites
‡ Ease of recruitment - Hiring top talent, higher retention
of top talent
‡ Increased employee productivity
‡ Easier financing
Y


Y
÷ 
‡ The code provides a framework for efficient and
transparent running of listed companies to
enhance shareholder value.
‡ The regulators need to be vigilant to enforce the
code in its true spirit.
‡ Concerns mechanisms by which corporate
managers are held accountable for corporate
conduct and performance.
 ’ Y  Y

 


@Codes stimulate discussion of corporate governance issues
@Codes encourage companies to adopt widely-accepted
governance standards
@Codes help explain both governance-related legal
requirements and common corporate governance practices
to investors
@Codes can be used to benchmark supervisory and
management bodies
@Codes may help prepare the ground for changes in
securities regulation and company law, where such changes
are deemed necessary
Y 
u


¦ 


Y 
‡ A consumer can be a consumer for goods or consumer
for services.
‡ A consumer is one who buys some goods for
consideration for his use or one who uses such goods
with approval of such buyer.
‡ The buyer who buys goods and uses the same for
commercial purpose can not claim protection under the
Act.
‡ But a consumer of services even if he utilizes it for
commercial purpose can be safeguarded by the act.
G 

Y 

‡ He should be protected from the consumption of unsafe

products such as adulterated eatables, spurious medicines etc.
‡ The economic interest of the consumer should be protected
against unfair trade practices, deceptive and false
advertisements.
Y 
‡ The movement seeking to protect and inform consumers by
requiring such practices as honest packaging and advertising,
product guarantees, and improved safety standards.
‡ Protecting consumers against useless, inferior, or dangerous
products, misleading advertising, unfair pricing, etc
‡ Citizens need protection of their consumer rights in three ways:
Ł In the market place against problem goods and services; against bad
trade practices; exploitative prices and unethical marketing;
Ł From governments as supplier of basic goods and services for poor and
vulnerable consumers; as formulators of public polices so that they are
just, equitable and protective; and as provider of good governance;
Ł From the State to provide reliable consumer protection structures which
ensure safety against weaknesses of the market and its failures and
which ensure good government.
 


Y 
G 
‡ Unorganized Consumers:- India is a vest country where
people have varied social economic backgrounds. The
consumer are so widely spread that it is not possible to
organize them for a cause for consumer protection.
‡ Literacy and Ignorance:- A large chunk of Indian consumers
are illiterate so they do not understand their right etc. People
are not even aware of various rights endowed to them under
various legislative measures.
‡ Production of Duplicate Product:- The advancement of
science and technology has enabled producers to bring out
similar products. There is a galore of duplicate products. It is
difficult for the consumer to distinguish between a genuine
and a duplicate product.
 


Y 
G 
‡ Deceptive Advertising:- Advertising is the main media of
promoting goods. Some producers give deceptive and wrong
information about quality, utility and safety of goods.
‡ Malpractice of Businessman:- The consumer expects products
of goods quality at reasonable prices. He wants full value for
the money he spends. In many cases the consumers are
exploited by selling to them goods which are defective,
substandard and inferior.
J


Y 
G 
‡ ÷lobalization and its various instruments have posed new
challenges for consumer protection especially in poor
countries.
‡ The greatest challenge for consumer movement today is to
raise cogent and effective voice for bringing fairness in free
market economy at local, national and global levels.
‡ The protection of consumers from hazards to their health and
safety as they are exposed to many hazards- physical,
environmental and exploitation due to unfair trade practices.
J


Y 
G 
‡ For the consumer ±
Ł Making the consumer aware of his rights and the forms of
prevalent exploitation
‡ For the organization ±
Ł Need for survival
Ł Use of resources
Ł Social Responsibilities

! 


Y 
‡    
: Right to be protected against
fraudulent, misleading, and deceitful information or
advertisement or labeling
‡    : Right to be protected against the
marketing of goods that are hazardous to public health
‡   Y : Right to be assured wherever
possible to a variety of goods and services at
competitive prices with satisfactory quality
‡    
: Right to get fair, inexpensive, and
quick redressal of grievances

! 


Y 
‡  
 
: To seek legal redressal against
unfair or restrictive trade practices or exploitation.
‡   Y 
#  : To have access to
consumer education.

The government has declared 24 December as 'National

Consumer Day', since the President gave his assent on that
day to the enactment of the historic Consumer Protection
Act, 1986. Besides this, 15 March is observed as 'World
Consumer Rights Day' every year.
! 


Y 

‡ Consumer right is defined as 'the right to be informed

about the quality, quantity, potency, purity, standard
and price of goods or services, as the case may be, so as
to protect the consumer against unfair trade practices¶
Ł The right to be protected from all types of hazardous goods and
services
Ł The right to be fully informed about the performance and quality
of all goods and services
Ł The right to free choice of goods and services
Ł The right to be heard in all decision-making processes related to
consumer interests
Ł The right to seek redressal, whenever consumer rights have been
infringed
Ł The right to complete consumer education
! 


Y 

‡ A complaint for infringement of consumer rights could be

made under the following circumstances in the nearest
designated consumer court:
‡ The goods or services bought by a person or agreed to be
bought by a person suffer from one or more deficiencies or
defects in any respect
‡ A trader or a service provider resorting to restrictive or unfair
trade practices
‡ A trader or a service provider charging a price in excess of the
price displayed on the goods or the price that had been agreed
upon between the parties or the price that had been stipulated
under any law in force
‡ ÷oods or services that pose a hazard to the safety and life of a
person offered for sale, knowingly or unknowingly, causing
injury to health, safety or life
Y 

J
‡ The government is monitoring the disposal of cases by
the consumer courts through National Commission
‡ Since its inception and up to March 2004, 32,910 cases
were filed out of which 24,974 cases disposed of in the
National Commission
‡ Similarly 3,01,485 cases were filed and 1,97,797 cases
disposed of in the State Commissions and 18,86,236
cases were filed and 16,46,698 cases disposed of in the
district forum
‡ Overall 18,69,469 cases have been disposed of out of
22,20,631 cases filed with a remarkable disposal rate of
84.2 per cent
X  
 
 Y 

‡ Adulteration (inferior product) ± e.g. petrol mixed with kerosene,
vanaspati mixed with ghee / butter
‡ Sales of spurious products (selling something of no value instead
of the real product) ± e.g. water instead of glucose
‡ Use of false weights and measures (sweets with its box)
‡ Sale of duplicates (e.g. Rayban glasses)
‡ Black marketing and hoarding (not making goods short of supply
easily available, and charging exorbitantly)- e.g. LP÷ gas
‡ Tie-in Sales (buy goods with pre-conditions of paying for another
service in advance). e.g. take new gas connection with gas burner
‡ Offering gifts having no additional value / coupons to collect gift
on next purchase (e.g. lottery coupons)
‡ Misleading advertisement (suppressing information)
‡ Sale of sub-standard goods ± not ISO / FPO certified
Y



 
 
‡ One or more defects in goods
‡ Deficiencies in services offered
‡ Trader charging excess price than fixed /
displayed

Y



 
 
‡ District Forums (District level)
‡ State Commissions (State level)
‡ National Commissions (National level)
 Y 
G

 

@ An act to provide for better protection of the interests of
consumers and for that purpose to make provision for the
establishment of consumer councils and other authorities for the
settlement of consumer disputes and for matters connected
therewith.
@ The Consumer Protection Act has been enacted to protect the
interest of a consumer of goods & services.
@ Its objective is to provide a simple ,speedy and inexpensive way
towards redressal of grievances in case of any deficiency/defect
in goods and services bought/used by him for a consideration.
@ The sole purpose of the act is to protect the interest of common
consumers purchasing goods for their own consumption.
Y 
G 
 
"#$%
‡ The right to be protected against marketing of goods
which are hazardous to life and property.
‡ The right to be assured, wherever possible, access to a
variety of goods at competitive prices.
‡ The right to be informed about quality, quantity,
potency, purity, standard and price of goods to protect
the consumer against unfair trade practices.
‡ The right to seek redressal against unfair trade practices
or unscrupulous exploitation of consumer.
‡ The right to consumer education.
 Y 
G 
 
‡ Objective:
Ł The Consumer Protection Act 1986 is a social welfare
legislation which was enacted as a result of widespread
consumer protection movement.
Ł The main object of the legislature in the enactment of
this act is to provide for the better protection of the
interests of the consumer and to make provisions for
establishment of consumer councils and other
authorities for settlement of consumer disputes and
matter therewith connected.
Ł Protecting consumers against unfair trade practice,
restrictive trade practice, defects and deficiencies
 Y 
G 
 
‡ Objective:
Ł In order to promote and protect the rights and interests
of consumers, quasi judicial machinery is sought to be
set up at district, state and central levels.
Ł These quasi judicial bodies have to observe the principles
of natural justice and have been empowered to give
reliefs, of specific nature and also to impose penalties for
non compliance of the orders given by such bodies.
Ł The main object of these bodies is to provide speedy and
simple redressal to consumer disputes.
Ł It is one of the benevolent pieces of legislation intended
to protect the consumers at large from exploitation.
‰

 

  
‡ The act was passed in Lok Sabha on 9th December,1986 and
Rajya Sabha on 10th December, 1986 and assented by the
President of India on 24th December, 1986 and was published
in the ÷azette of India on 26th December, 1986.
‡ This act was enacted in the 37th year of the Republic of India
and was amended from time to time in the following years i.e.
1991, 1993 and 2002.
î 



 
Ł Name and full address of complainant
Ł Name and full address of opposite party
Ł Description of goods and services
Ł Quality and quantity
Ł Price
Ł Date & proof of purchase
Ł Nature of deception
Ł Type of redressal prayed for
 




 
‡ As per the Act, the consumer protection councils have
been established at Central, State and District levels to
promote and protect the consumer rights
‡ Benefit
Ł Disposal within 90 days
Ł No adjournment shall ordinarily be granted - Speedy trial
‡ Relief
Ł Removal of defects in goods or deficiency in services
Ł Replacement of defective goods
Ł Refund against defective goods or deficient services
Ł Compensation
Ł Prohibition on sale of hazardous goods