By Chirag Chotrani Sir (Yes Academy)
CS Updates Hub | www.CSaspirant.com:
Elements of Corporate Governance - (Bhai) (Bhai) (Bhai) (chirag) (Bhai) (Macha Diye) (Aag) (Laga ke) (Rakh di)
B - Board Appointment
B - Board Skills
B - Board Independence
C - Code if Conduct
B - Board Induction
M - Monitoring Board Performance
A - Audit Committee
L - Legislation
R - RMC
History Development of Corporate Governance in UK
1992 - me khai CADBURY
1995 - Me kaha hogaya hai mota to khaai ‘Greenburry’
1999 - fir b patla nahi hua to logo ne kaha ‘Turnbull’
2020 - UK - Stewardship Code
UK Stewardship Code -
5/3/3/1
Purpose
*P1 - Long Term Value leading to sustainable Benefits for economy/Environment/society
* P2 - Governance to support stewardship
*P3 - Manage Conflict of Interest and put the best Interest of clients
*P4 - Identify and manage Systemic Risk
*P5 - Review The Policy and process to assess the effectiveness
Investment Approach
P6 - Take account of the needs of the clients and communicate outcome of activites
*P7 - Integrate Stewardship and ESG to fulfill responsibilities
P8 - monitor managers and hold them accountable for anything wrong
Engagement
P9 - Engage with Issuers to Enhance Value
P10 - Whenever necessary do collaborative approach
P11 - Escalate stewardship where necessary
Exercise rights and responsibilities
P12 - Actively exercise the rights and responsibilities
CG - Australia
- ASX CG Council forms principles and Recommendations
- These are not mandatory and follows the - ‘If not why not’ approach
- 8 Principles
(Raat ko) (Rajasthan) (Royal) (laga Diya) (Mumbai) (Indians ki) (Sanju) (Samson yaar)
R - Respect the rights of Security Holders
R - Recognise and manage risk
R - Remunerate Fairly
L - Lay solid Foundation for management
M - make timely disclosures
I - Install a culture of acting lawfully
S - Structure the board
S - safeguard the Integrity of Board reports
Singapore - Matlab - Board -
a Effective Board - Responsible for Long Term success
b Appropriate Level of Independence
c division of Responsibility
d transparent process of appointment
e Annual Assessment of Effectiveness as a whole
f Remuneration of Board
g Audit Committee
h Treat All shareholders faily
i Communicates with shareholders
OECD Principles -
Dekho Board ki responsibility hai | To ensure Effective Governance | To Protect the shareholders | Even Institutional Shareholders | Stakeholders ko mat bhulna | Itha kar hi liya hai to disclosure kar do
Corporate Governance in India
1998 (Desirable Corporate governance code)
1999 Kumar Mangalam - Clause 49 was because of them
2002 Naresh Chandra - was formed to review and amend the Auditor -Client Relationship and role of ID
2003 - Narayan Murthy Committee - Revised Clause 49
2004 JJ Irani Committee - proposed revision to CA1956
- Companies Act 2013
- Sebi LODR 2015
- Uday Kotak Committee 2017:
To deal with:
a. Independence of Independent Directors
b. RPT
c. Accounting and Auditing Practices
d. Disclosures and Transparency Issues
The Committee Recommended:
a. Institution of ID
b. Accounting and Audit related Issues
c. procedure for dealing with RPT
d. Composition of Board
e. Board Committees
f. Roles and Responsibility of board