501004044_ Corporate Governance and CII Codes _ Report

8/3/2019 501004044_ Corporate Governance and CII Codes _ Report

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Corporate governanceand CII Codes

2012

Submitted by:

Pankaj Goyal

501004044

MBA, G2

Submitted to:

Prof. Girish Jaswal


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Table of Contents

Corporate................................................................................................................................................. ii

Governance ............................................................................................................................................. 1

Principle of corporate governance .......................... ................................ ...................... ....................... 2

Corporate governance models around the world .................................................. ...................... ......... 3

Regulation ........................................................................................................................................... 4

Framework of corporate governance .......................... ................................ ....................... .................. 5

Corporate Governance: A Code ............................................................................................................... 6

A Minimal Definition ............................. ......................... ........................... ................................ ........... 6

Guidelines and disclosures:.................................................................................................................... 12

References ............................................................................................................................................. 15


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Corporate

Corporate is adjective meaning of or relating to a corporation derived from the nouncorporation.

A corporation is an organization created (incorporated) by a group of shareholders whohave ownership of the corporation.

The elected Board of directors appoint and oversee management of the corporation.

Governance

Oxford English Dictionary defines Governance as the act, manner, fact or function of

governing, sway, control. The word has Latin origins that suggest the notion of 'steering'. It deals

with the processes and systems by which an organization or society operates.

Corporate governance

Corporate governance refers to the set of systems, principles and processes by which a company

is governed. They provide the guidelines as to how the company can be directed or controlled

such that it can fulfil its goals and objectives in a manner that adds to the value of the company

and is also beneficial for all stakeholders in the long term. Stakeholders in this case would

include everyone ranging from the board of directors, management, shareholders to customers,

employees and society. The management of the company hence assumes the role of a trustee for

all the others.

Corporate governance is "the system by which companies are directed and controlled" (Cadbury

Committee, 1992. It involves a set of relationships between a companys management, its board,

its shareholders and other stakeholders; it deals with prevention ar mitigation of the conflict of

interests of stakeholders. Ways of mitigating or preventing these conflicts of interests include the

processes, customs, policies, laws, and institutions which have impact on the way

a company is controlled. An important theme of corporate governance is the nature and extent of

accountability of people in the business, and mechanisms that try to decrease the principalagent

problem.

Corporate governance also includes the relationships among the many stakeholders involved and

the goals for which the corporation is governed. In contemporary business corporations, the mainexternal stakeholder groups are shareholders, debt holders, trade creditors, suppliers, customers

and communities affected by the corporation's activities. Internal stakeholders are the board of

directors, executives, and other employees. It guarantees that an enterprise is directed and

controlled in a responsible, professional, and transparent manner with the purpose of

safeguarding its long-term success. It is intended to increase the confidence of shareholders and

capital-market investors.


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A related but separate thread of discussions focuses on the impact of a corporate governance

system on economic efficiency, with a strong emphasis on shareholders' welfare; this aspect is

particularly present in contemporary public debates and developments in regulatory policy

There has been renewed interest in the corporate governance practices of modern corporations

since 2001, particularly due to the high-profile collapses of a number of large corporations, most

of which involved accounting fraud. Corporate scandals of various forms have maintained publicand political interest in the regulation of corporate governance. In the U.S., these include Enron

Corporation and MCI Inc. Their demise is associated with the U.S. federal government passing

the Sarbanes-Oxley Act in 2002, intending to restore public confidence in corporate governance.

Comparable failures in Australia (HIH, One.Tel) are associated with the eventual passage of

the CLERP 9 reforms. Similar corporate failures in other countries stimulated increased

regulatory interest

Principle of corporate governance

Contemporary discussions of corporate governance tend to refer to principles raised in threedocuments released since 1990: The Cadbury Report (UK, 1992), the Principles of Corporate

Governance (OECD, 1998 and 2004), the Sarbanes-Oxley Act of 2002 (US, 2002). The Cadbury

and OECD reports present general principals around which businesses are expected to operate to

assure proper governance. The Sarbanes-Oxley Act, informally referred to as Sarbox or Sox, is

an attempt by the federal government in the United States to legislate several of the principles

recommended in the Cadbury and OECD reports.

Rights and equitable treatment of shareholders: Organizations should respect the rights ofshareholders and help shareholders to exercise those rights. They can help shareholders

exercise their rights by openly and effectively communicating information and by

encouraging shareholders to participate in general meetings. Interests of other stakeholders: Organizations should recognize that they have legal,

contractual, social, and market driven obligations to non-shareholder stakeholders, including

employees, investors, creditors, suppliers, local communities, customers, and policy makers.

Role and responsibilities of the board: The board needs sufficient relevant skills andunderstanding to review and challenge management performance. It also needs adequate size

and appropriate levels of independence and commitment

Integrity and ethical behavior: Integrity should be a fundamental requirement in choosingcorporate officers and board members. Organizations should develop a code of conduct for

their directors and executives that promotes ethical and responsible decision making.

Disclosure and transparency: Organizations should clarify and make publicly known theroles and responsibilities of board and management to provide stakeholders with a level of

accountability. They should also implement procedures to independently verify and

safeguard the integrity of the company's financial reporting. Disclosure of material matters

concerning the organization should be timely and balanced to ensure that all investors have

access to clear, factual information.


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Corporate governance models around the world

There are many different models of corporate governance around the world. These differ

according to the variety of capitalism in which they are embedded. The Anglo-American

"model" tends to emphasize the interests of shareholders. The coordinated or multi-stakeholder

model associated with Continental Europe and Japan also recognizes the interests of workers,

managers, suppliers, customers, and the community.

Continental Europe

Some continental European countries, including Germany and the Netherlands, require a two-

tiered Board of Directors as a means of improving corporate governance. In the two-tiered board,

the Executive Board, made up of company executives, generally runs day-to-day operations

while the supervisory board, made up entirely of non-executive directors who represent

shareholders and employees, hires and fires the members of the executive board, determines their

compensation, and reviews major business decisions. See also Aktienge sells chaft.

India

India's SEBI Committee on Corporate Governance defines corporate governance as the

"acceptance by management of the inalienable rights of shareholders as the true owners of the

corporation and of their own role as trustees on behalf of the shareholders. It is about

commitment to values, about ethical business conduct and about making a distinction between

personal & corporate funds in the management of a company." It has been suggested that the

Indian approach is drawn from the Gandhian principle of trusteeship and the Directive Principles

of the Indian Constitution, but this conceptualization of corporate objectives is also prevalent

in Anglo-American and most other jurisdictions.

The United States and the UK

The so-called "Anglo-American model" (also known as "the unitary system") emphasizes a

single-tiered Board of Directors composed of a mixture of executives from the company and

non-executive directors, all of whom are elected by shareholders. Non-executive directors are

expected to outnumber executive directors and hold key posts, including audit and compensation

committees. The United States and the United Kingdom differ in one critical respect with regard

to corporate governance: In the United Kingdom, the CEO generally does not also serve as

Chairman of the Board, whereas in the US having the dual role is the norm, despite major

misgivings regarding the impact on corporate governance.

In the United States, corporations are directly governed by state laws, while the exchange

(offering and trading) of securities in corporations (including shares) is governed by federal

legislation. Many U.S. states have adopted the Model Business Corporation Act, but the

dominant state law for publicly-traded corporations is Delaware, which continues to be the place

of incorporation for the majority of publicly-traded corporations. Individual rules for

corporations are based upon the corporate charter and, less authoritatively, the corporate bylaws.


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Shareholders cannot initiate changes in the corporate charter although they can initiate changes

to the corporate bylaws.

Regulation

Legal environment - General

Corporations are created as legal persons by the laws and regulations of a particular jurisdiction.

These may vary in many respects between countries, but a corporation's legal person status is

fundamental to all jurisdictions and is conferred by statute. This allows the entity to hold

property in its own right without reference to any particular real person. It also results in the

perpetual existence that characterizes the modern corporation. The statutory granting of

corporate existence may arise from general purpose legislation (which is the general case) or

from a statute to create a specific corporation, which was the only method prior to the 19th

century.

In addition to the statutory laws of the relevant jurisdiction, corporations are subject to common

law in some countries, and various laws and regulations affecting business practices. In most

jurisdictions, corporations also have a constitution that provides individual rules that govern the

corporation and authorize or constrain its decision-makers. This constitution is identified by a

variety of terms; in English-speaking jurisdictions, it is usually known as the Corporate Charter

or the Articles of Association. The capacity of shareholders to modify the constitution of their

corporation can vary substantially.

Codes and guidelines

Corporate governance principles and codes have been developed in different countries and issued

from stock exchanges, corporations, institutional investors, or associations (institutes) of

directors and managers with the support of governments and international organizations. As arule, compliance with these governance recommendations is not mandated by law, although the

codes linked to stock exchange listing requirements may have a coercive effect. For example,

companies quoted on the London, Toronto and Australian Stock Exchanges formally need not

follow the recommendations of their respective codes. However, they must disclose whether they

follow the recommendations in those documents and, where not, they should provide

explanations concerning divergent practices. Such disclosure requirements exert a significant

pressure on listed companies for compliance.

One of the most influential guidelines has been the 1999 OECD Principles of Corporate

Governance. This was revised in 2004. The OECD guidelines are often referenced by countries

developing local codes or guidelines. Building on the work of the OECD, other internationalorganizations, private sector associations and more than 20 national corporate governance codes,

the United Nations Intergovernmental Working Group of Experts on International Standards of

Accounting and Reporting (ISAR) has produced their Guidance on Good Practices in Corporate

Governance Disclosure. This internationally agreed benchmark consists of more than fifty

distinct disclosure items across five broad categories:


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Auditing Board and management structure and process Corporate responsibility and compliance Financial transparency and information disclosure Ownership structure and exercise of control rightsThe investor-led organisation International Corporate Governance Network (ICGN) was set up

by individuals centered on the ten largest pension funds in the world 1995. The aim is to promote

global corporate governance standards. The network is led by investors that manage 18 trillion

dollars and members are located in fifty different countries. ICGN has developed a suite of

global guidelines ranging from shareholder rights to business ethics. The World Business

Council for Sustainable Development (WBCSD) has done work on corporate governance,

particularly on accountability and reporting, and in 2004 released Issue Management Tool:

Strategic challenges for business in the use of corporate responsibility codes, standards, and

frameworks. This document offers general information and a perspective from a business

association/think-tank on a few key codes, standards and frameworks relevant to the

sustainability agenda.In 2009, the International Finance Corporation and the UN Global Compact released a

report, Corporate Governance - the Foundation for Corporate Citizenship and Sustainable

Business, linking the environmental, social and governance responsibilities of a company to its

financial performance and long-term sustainability.

Most codes are largely voluntary. An issue raised in the U.S. since the 2005 Disney decision is

the degree to which companies manage their governance responsibilities; in other words, do they

merely try to supersede the legal threshold, or should they create governance guidelines that

ascend to the level of best practice. For example, the guidelines issued by associations of

directors, corporate managers and individual companies tend to be wholly voluntary but such

documents may have a wider effect by prompting other companies to adopt similar practices.

Framework of corporate governance

1. Supervisory Board/ Committee/ Team2. Audit Committee3. Internal Audit4. Statutory Audit5. Disclosure of information6. Risk management framework7. Internal Control framework8. Whistle blower policy


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Corporate Governance: A Code

Although corporate governance still remains an ambiguous and misunderstood phrase, three

aspects are becoming evident.

First, there is no unique structure of corporate governance in the developed world; nor is one

particular type unambiguously better than others. Thus, one cannot design a code of corporategovernance for Indian companies by mechanically importing one form or another.

Second, Indian companies, banks and financial institutions can no longer afford to ignore better

corporate practices. As India gets integrated in the world market, Indian as well as international

investors will demand greater disclosure, more transparent explanation for major decisions and

better shareholder value.

Third, corporate governance goes far beyond company law. The quantity, quality and frequency

of financial and managerial disclosure, the extent to which the board of directors exercise their

fiduciary responsibilities towards shareholders, the quality of information that management sharewith their boards, and the commitment to run transparent companies that maximize long term

shareholder value cannot be legislated at any level of detail. Instead, these evolve due to the

catalytic role played by the more progressive elements within the corporate sector and, thus,

enhance corporate transparency and responsibility.

A Minimal Definition

Corporate governance deals with laws, procedures, practices and implicit rules that determine a

companys ability to take managerial decisions its claimantsin particular, its shareholders,

creditors, customers, the State and employees. There is a global consensus about the objective ofgood corporate governance: maximizing long term shareholder value. Since shareholders are

residual claimants, this objective follows from a premise that, in well performing capital and

financial markets, whatever maximizes shareholder value must necessarily maximize corporate

prosperity, and best satisfy the claims of creditors, employees, shareholders, and the State. For a

corporate governance code to have real meaning, it must first focus on listed companies. These

are financed largely by public money (be it equity or debt) and, hence, need to follow codes and

policies that make them more accountable and value oriented to their investing public. There is a

diversity of opinion regarding beneficiaries of corporate governance. The Anglo-American

system tends to focus on shareholders and various classes of creditors. Continental Europe, Japan

and South Korea believe that companies should also discharge their obligations towards

employees, local communities, suppliers, ancillary units, and so on. In the first instance, it is

useful to limit the claimants to shareholders and various types of creditors. There are two reasons

for this preference.

1. The corpus of Indian labor laws are strong enough to protect the interest of workers in the

organized sector, and employees as well as trade unions are well aware of their legal rights. In


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contrast, there is very little in terms of the implementation of law and of corporate practices that

protects the rights of creditors and shareholders

2. There is much to recommend in law, procedures and practices to make companies more

attuned to the needs of properly servicing debt and equity. If most companies in India appreciate

the importance of creditors and shareholders, then we will have come a long way.

Irrespective of differences between various forms of corporate governance, all recognize that

good corporate practices must at the very least satisfy two sets of claimants: creditors and

shareholders. In the developed world, company managers must perform to satisfy creditors dues

because of the disciplining device of debt, which carries with it the credible threat of

management change via bankruptcy. Analogously, managers have to look after the right of

shareholders to dividends and capital gains because if they do not do so over time, they face the

real risk of take-over. An economic and legal environment that puts a brake on the threat of

bankruptcy and prevents take-over is a recipe for systematic corporate mis-governance.

The key to good corporate governance is a well functioning, informed board of directors. The

board should have a core group of excellent, professionally acclaimed non-executive directors

who understand their dual role: of appreciating the issues put forward by management, and of

honestly discharging their fiduciary responsibilities towards the companys shareholders as well

as creditors.

Recommendation 1

There is no need to adopt the German system of two-tier boards to ensure desirable corporate

governance. A single board, if it performs well, can maximize long term shareholder value just

as well as a two- or multi-tiered board. Equally, there is nothing to suggest that a two-tier board,

per se, is the panacea to all corporate problems.

Recommendation 2

Any listed companies with a turnover of Rs.100 crores and above should have professionallycompetent, independent, non-executive directors, who should constitute

At least 30 percent of the board if the Chairman of the company is a non-executive director, or At least 50 percent of the board if the Chairman and Managing Director is the same person.

Recommendation 3

No single person should hold directorships in more than 10 listed companies.


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Recommendation 4

For non-executive directors to play a material role in corporate decision making and maximizinglong term shareholder value, they need to

become active participants in boards, not passive advisors;

have clearly defined responsibilities within the board such as the Audit Committee; and know how to read a balance sheet, profit and loss account, cash flow statements and financialratios and have some knowledge of various company laws. This, of course, excludes those who

are invited to join boards as experts in other fields such as science and technology.

Recommendation 5

To secure better effort from non-executive directors, companies should: Pay a commission over and above the sitting fees for the use of the professional inputs. The

present commission of 1% of net profits (if the company has a managing director), or 3% (ifthere is no managing director) is sufficient.

Consider offering stock options, so as to relate rewards to performance. Commissions arerewards on current profits. Stock options are rewards contingent upon future appreciation of

corporate value. An appropriate mix of the two can align a non-executive director towardskeeping an eye on short term profits as well as longer term shareholder value.

Recommendation 6

While re-appointing members of the board, companies should give the attendance record of the

concerned directors. If a director has not been present (absent with or without leave) for 50percent or more meetings, then this should be explicitly stated in the resolution that is put to

vote. As a general practice, one should not re-appoint any director who has not had the timeattend even one half of the meetings.

Recommendation 7

Key information that must be reported to, and placed before, the board must contain:

Annual operating plans and budgets, together with up-dated long term plans. Capital budgets, manpower and overhead budgets.

Quarterly results for the company as a whole and its operating divisions or business segments. Internal audit reports, including cases of theft and dishonesty of a material nature.

Show cause, demand and prosecution notices received from revenue authorities which areconsidered to be materially important. (Material nature is any exposure that exceeds 1 percent of

the companys net worth). Fatal or serious accidents, dangerous occurrences, and any effluent or pollution problems.

Default in payment of interest or non-payment of the principal on any public deposit, and/or toany secured creditor or financial institution.

Defaults such as non-payment of inter-corporate deposits by or to the company, or materiallysubstantial non-payment for goods sold by the company.

Any issue which involves possible public or product liability claims of a substantial nature,including any judgment or order which may have either passed strictures on the conduct of the


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company, or taken an adverse view regarding another enterprise that can have negativeimplications for the company.

Details of any joint venture or collaboration agreement. Transactions that involve substantial payment towards goodwill, brand equity, or intellectual

property.

Recruitment and remuneration of senior officers just below the board level, includingappointment or removal of the Chief Financial Officer and the Company Secretary. Labor problems and their proposed solutions.

Quarterly details of foreign exchange exposure and the steps taken by management to limit therisks of adverse exchange rate movement, if material.

Recommendation 8

1. Listed companies with either a turnover of over Rs.100 crores or a paid-up capital of Rs.20crores should set up Audit Committees within two years.

2. Audit Committees should consist of at least three members, all drawn from a companys non-executive directors, who should have adequate knowledge of finance, accounts and basic

elements of company law.3. To be effective, the Audit Committees should have clearly defined Terms of Reference and its

members must be willing to spend more time on the companys work vis--vis other non-executive directors.

4. Audit Committees should assist the board in fulfilling its functions relating to corporateaccounting and reporting practices, financial and accounting controls, and financial statements

and proposals that accompany the public issue of any securityand thus provide effectivesupervision of the financial reporting process.

5. Audit Committees should periodically interact with the statutory auditors and the internalauditors to ascertain the quality and veracity of the companys accounts as well as the capability

of the auditors themselves.6. For Audit Committees to discharge their fiduciary responsibilities with due diligence, it must

be incumbent upon management to ensure that members of the committee have full access tofinancial data of the company, its subsidiary and associated companies, including data on

contingent liabilities, debt exposure, current liabilities, loans and investments.7. By the fiscal year 1998-99, listed companies satisfying criterion (1) should have in place a

Strong internal audit department, or an external auditor to do internal audits; without this, anyAudit Committee will be toothless.


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Desirable closure

Recommendation 9

Under Additional Shareholders Information, listed companies should give data on:1. High and low monthly averages of share prices in a major Stock Exchange where the company

is listed for the reporting year.2. Greater detail on business segments up to 10% of turnover, giving share in sales revenue,

review of operations, analysis of markets and future prospects.

Recommendation 10

1. Consolidation of Group Accounts should be optional and subject to

The FIs allowing companies to leverage on the basis of the groups assets, and The Income Tax Department using the group concept in assessing corporate income tax.

2. If a company chooses to voluntarily consolidate, it should not be necessary to annex theaccounts of its subsidiary companies under section 212 of the Companies Act.

3. However, if a company consolidates, then the definition of group should include the parentcompany and its subsidiaries (where the reporting company owns over 50% of the voting stake).

Recommendation 11

Major Indian stock exchanges should gradually insist upon a compliance certificate, signed by

the CEO and the CFO, which clearly states that:

The management is responsible for the preparation, integrity and fair presentation of the

financial statements and other information in the Annual Report, and which also suggest that thecompany will continue in business in the course of the following year.

The accounting policies and principles conform to standard practice, and where they do not,

full disclosure has been made of any material departures.

The board has overseen the companys system of internal accounting and administrative

controls systems either director or through its Audit Committee (for companies with a turnover

of Rs.100 crores or paid-up capital of Rs.20 crores)

Recommendation 12

For all companies with paid-up capital of Rs. 20 crores or more, the quality and quantity ofdisclosure that accompanies a GDR issue should be the norm for any domestic issue.


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Capital Market Issues

Recommendation 13

Government must allow far greater funding to the corporate sector against the security of shares

and other paper.

Creditors Rights

Recommendation 14It would be desirable for FIs as pure creditors to rewrite their covenants to eliminate having

nominee directors except:a) In the event of serious and systematic debt default; and

b) In case of the debtor company not providing six-monthly or quarterly operational data to theconcerned FI(s).

Recommendation 15

1. If any company goes to more than one credit rating agency, then it must divulge in the

prospectus and issue document the rating of all the agencies that did such an exercise.2. It is not enough to state the ratings. These must be given in a tabular format that shows where

the company stands relative to higher and lower ranking. It makes considerable difference to aninvestor to know whether the rating agency or agencies placed the company in the top slots, or in

the middle, or in the bottom.3. It is essential that we look at the quantity and quality of disclosures that accompany the issue

of company bonds, debentures, and fixed deposits in the USA and Britainif only to learn whatmore can be done to inspire confidence and create an environment of transparency.

4. Finally, companies which are making foreign debt issues cannot have two sets of disclosureNorms: an exhaustive one for the foreigners, and a relatively minuscule one for Indian investors.

Recommendation 16

Companies that default on fixed deposits should not be permitted to

accept further deposits and make inter-corporate loans or investments until the default is madegood; and

declare dividends until the default is made good.


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On FIs and Nominee Directors

Recommendation 17

Reduction in the number of companies where there are nominee directors. It has been argued by

FIs that there are too many companies where they are on the board, and too few competentofficers to do the task properly. So, in the first instance, FIs should take a policy decision towithdraw from boards of companies where their individual shareholding is 5 percent or less, or

total FI holding is under 10 percent.

Guidelines and disclosures:

Board of Directors: frequency of meetings and composition

Board must meet at least at least four times a year, with a maximum time gap of fourmonths between two successive meetings

If the chairman of the Company is a non-executive then one-third of the board shouldconsist of independent directors, and 50% otherwise

Independent defined as those directors who, apart from receiving directorsremuneration do not have any other material pecuniary relationship or transactions with

the company, its promoters, management or subsidiaries, which in the view of the boardmay affect independence of judgment

This definition may be soon strengthenedBoard of Directors: frequency of meetings and composition

The frequency of board meetings and board committee meetings, with their dates, mustbe fully disclosed to shareholders in the annual report of the company

The attendance record of all directors in board meetings and board committee meetingsmust be fully disclosed to shareholders in the annual report of the company

Full and detailed remuneration of each director (salary, sitting fees, commissions, stockoptions and perquisites) must be fully disclosed to shareholders in the annual report of thecompany

Loans given to executive directors are capped (no loans permitted to non-executives), andmust be fully disclosed to shareholders in the annual report of the company

Board of Directors: information that must be supplied

Annual, quarter, half year operating plans, budgets and updates Quarterly results of company and its business segments Minutes of the audit committee and other board committees Recruitment and remuneration of senior officers Materially important legal notices and claims, as well as any accidents, hazards, pollution

issues and labor problems


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Any actual or expected default in financial obligations Details of joint ventures and collaborations Transactions involving payment towards goodwill, brand equity and intellectual property Any materially significant sale of business and investments Foreign currency and other risks and risk management

Any regulatory non-compliance

Board of Directors: Audit Committee

Audit Committee is mandatory Must have minimum of three members, all non-executive directors, the majority of whom

are independent

Chairman must be an independent director, and must be present at the annualshareholders meeting to answer audit or finance related questions

At least one member must be an expert in finance/accounts Must have at least three meetings per year, including one before finalization of annual

accounts Must meet with statutory auditors and internal auditors; have the powers to seek anyfinancial, legal or operational information from the management; obtain outside legal orprofessional advice

Board of Directors: Audit Committee functions

Oversight of the companys financial reporting process to ensure that the financialstatement is correct, sufficient and credible

Appointment / removal of external auditor and fixing of audit fees Reviewing with management the annual financial statements before submission to the

board, focusing on:

Changes in accounting policies and practices Major accounting entries Qualifications in draft audit report Significant adjustments arising out of audit The going concern assumption Compliance with accounting standards, with stock exchange and legal

requirements Any related party transactions

Board of Directors: Audit Committee functions

Adequacy of internal audit and internal control systems, through discussion with internaland statutory auditors as well as management

Significant findings, follow-up and action taken reports Discussion with internal and statutory auditors about scope and design of audits Reviewing financial and legal risks and companys risk management policies Examining reasons behind any materially significant default to creditors, bond-holders,

suppliers and shareholders


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Disclosures to shareholders in addition to balance sheet, P&L and cash flow statement

Board composition (executive, non-exec, independent)

Qualifications and experience of directors Number of outside directorships held by each director (capped at director not being a

member of more than 10 board-level committees, and Chairman of not more than 5)

Attendance record of directors Remuneration of directors Relationship (familial or pecuniary) with other directors Warning against insider trading, with procedures to prevent such acts Details of grievances of shareholders, and how quickly these were addressed Date, time and venue of annual general meeting of shareholders

Disclosures to shareholders in addition to balance sheet, P&L and cash flow statement

Dates of book closure and dividend payment Details of shareholding pattern Name, address and contact details of registrars and/or share transfer agents Details about the share transfer system Stock price data over the reporting year, and how the companys stock measured up to

the index Financial effects of stock options Financial effects of any share buyback Financial effects of any warrants that are to be exercised Chapter reporting corporate governance practices


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References

http://www.sebi.gov.in/ - Securities and Exchange Board of India http://www.bseindia.com/ - Bombay Stock Exchange Limited http://www.nfcgindia.org/library_int.htm-National Foundation for Corporate Governance http://www.ita.doc.gov/goodgovernance/ -International Trade Administration http://www.oecd.org/ -Organisation for Economic Co-operation and Development http://www.corpgov.net/ - Corporate governance network

Documents

501004044_ Corporate Governance and CII Codes _ Report