Essence of Corporate Governance

Generally the company's philosophy on corporate- Attendance of each director at the BOD meetings
governance is to attain the highest level ofand the last Annual General Meeting.
transparency, accountability and integrity. The true- Number of other BODS or Board Committees he
meaning of corporate governance is to satisfy theshe is a member or chairperson of.
aspirations of all stack holders, customers, suppliers,- Number of BOD meetings held, dates on which held.
leaders, employees, the shareholders and the3. Audit Committee:
expectations of the society. The Board of directors- Brief description of terms of reference.
supports the broad principles of corporate governance- Composition, names of members and chairperson.
and direct the action of the organization to achieve it's- Meetings of attendance during the year.
a vowed objective of transparency, accountability and4. Remuneration committee:
integrity.- Brief description of terms of reference.
Fundamental principles of corporate governance:- Composition, names of members and chairperson.
The basic objective of corporate governance is to- Attendance during the year.
maximize long term shareholder value. Therefore, good- Remuneration policy.
governance should address all issues that lead to a- Details of remuneration to all the directors, as per
value addition for the organization and serve theformat in main report.
interests of all the stakeholders.5. Shareholders Committee:
Transparency:- Name of non- executive director heading the
Transparency means accurate, adequate and timelycommittee.
disclosure of relevant information to the stakeholders.- Name and designation of compliance officer.
Without transparency, it is impossible to make any- Number of shareholders compliance officer.
progress towards good governance. Business heads- Number of shareholders complaints received so far.
should realize that transparency also creates immense- Number not solved to the satisfaction of
shareholder value. But, information Sharing is hinderedshareholders.
under the excuse of confidentiality. There is need to- Number of pending share transfer.
move towards international standards in terms of6. General Body Meetings:
disclosure of information by the corporate sector and- Location and time, where last Three Annual General
through all this to develop a high level of publicMeetings held.
confidence in business. Once a company has public- Whether special resolutions were put through postal
shareholding it is imperative that its commitment toballot last year, details of voting pattern.
financial transparency must be total. The Company is- Person who conducted the postal ballot exercise.
a trustee of the investors' money and this responsibility- Procedure for postal ballot.
in turn demands full disclosure. Corporations in India7. Disclosures:
must learn to work with transparency and impeccable- Disclosures on materially significant related party
integrity as these are the essential ingredients totransactions i.e., transactions of the company of
maximize their wealth and wealth of the nation.material nature, with its promoters, the directors, the
Transparency and disclosure are the pillars ofmanagement, their subsidiaries or relatives etc., that
corporate governance because they provide all themay have potential conflict with the interests of
stakeholders with the information necessary to judgecompany at large.
whether their interests are being taken care of.- Details of non- compliance by the company penalties,
Accountability:structures imposed on the company by the stock
Corporate governance a top down approachexchange, SEBI or any statutory authority, on any
chairman, Board of directors and chief executivesmatter related to capital markets, during the last three
must fulfill their responsibilities to make corporateyears.
governance a reality in Indian Industry. In companies8. Means of communication:
with good governance, accountability is not just bottom- Half yearly report sent to each household of
up but also follows the reverse order. A departmentshareholders.
head is responsible for every decision taken on behalf- Quarterly results in which web site, where displayed.
of his department. Accountant also favors the- Where it also displays official news releases.
objective of creating shareholder value.- The presentations made to institutional investors or to
Merit based Management:the analysts.
A strong board of directors is necessary to lead and9. General shareholder information:
support merit based management. The board had to- Annual General meeting: Date, Time and Venue-
be an independent, strong and non- partisan bodyFinancial Calendar - Date of Book closure - Dividend
where the sole motive should be decision makingpayment date- Listing on stock exchanges - stock
through business prudence. Though corporatecode - Market price data:- High low during each month
governance is much broader than corporatein last financial year. Performance in comparison to
management, an efficient and effective administrationbroad based indices such as BSE Sensex, CRISIL
of corporate sector is essential for meeting theIndex, etc.,
desired objectives. Corporate governance ensures- Registrar and Trade Agents: Share transfer system
that long term strategic objectives and plans are- Distribution of Share holding - dematerialization of
established and that the proper management structureshares and liquidity - Outstanding warrants or any
is in place it achieve those objectives while at theconvertible instruments, conversion date and likely
same time ensuring that the structure functions toimpact on equity- Plant locations - address for
maintain the company's integrity, reputation andcorrespondence.
responsibility to its various stakeholders. Thus,Future of Corporate Governance:
corporate governance involves the broad parametersNowadays, more and more progressive companies
of reporting system accountability and control.are drawing and enforcing codes of conduct and
Suggested List of items to be included in the Reportaccepting tougher accounting standards which are
on Corporate Governance in the Annual Reports ofmandated by law. These tendencies would be further
Boards:strengthened by a variety of forces like deregulation
1. A brief statement on company's philosophy on codeof economic reforms, disintermediation of financial
of governance.sector reforms, institutionalization of capital markets,
2. Board of Directors(BOD):globalization of financial markets and tax reforms for
- Composition and category of directors.block money transactions.