DESIRABLE CORPORATE GOVERNANCE IN INDIA A CODE

DESIRABLE CORPORATE GOVERNANCE IN INDIA A CODE - Transcript

DESIRABLE CORPORATE GOVERNANCE IN INDIA A CODE
RAHUL BAZAZ COMMITTEE REPORT EVIDENT ASPECTS 1 No unique structure of Corporate Governance 2 Indian Companies cannot ignore better corporate practices 3 Corporate Governance go far beyond Company law

RECOMMENDATIONS
BOARD OF DIRECTORS 1 Board should meet six times in a year 2 Professionally competent non executive directors 3 Directorship in not more than 10 companies 4 Non executive directors need to a become active participants in boards b have clearly defined responsibilities within the board c know how to read B S P L a c cash flow statements and financial ratios have some knowledge of company law 5 Non executive directors to get commission or stock options 6 While re appointing directors attendance record to be considered

RECOMMENDATIONS
7 Key information must be placed before the board 8 Audit Committees to be set up DESIRABLE DISCLOSURE 9 Listed companies should give data on a High and low monthly average of share prices b Statement of value added c Details of business segments or divisions 10 Consolidation of group accounts

RECOMMENDATIONS
11 Stock Exchanges should insist upon compliance certificates by the C E O and C F O 12 The quality and quantity of disclosure norms for GDR issue and domestic issue should be the same CAPITAL MARKET ISSUES 13 Greater funding of corporate sector against the security of shares and other papers

RECOMMENDATIONS
CREDITORS RIGHTS 14 Desirable for FI s to eliminate having nominee directors except a in the event of serious systematic debt default and b when debtor co not providing six monthly or quarterly operational data to the FI s 15 a Ratings of all credit rating agencies to be divulged b Ratings must be given in tabular format top middle or bottom slot c quality quantity of disclosure should be more d Cos having foreign debt issues no two disclosure norms

RECOMMENDATIONS
16 Companies defaulting in F D s should not be permitted to a accept further deposits make inter corporate loans b declare dividends until the default is made good FINANCIAL INSTITUTIONS NOMINEE DIRECTORS 17 Reduction in the number of companies where there are nominee directors CONCLUSION A code of C G cannot be static must be reviewed in 5 years