Corporate Governance ensures that the business of a firm is conducted in an ethical manner in compliance with the laws, rules and regulations and the industry best practices. A company's corporate governance is important to investors since it shows a company's direction and business integrity. Good corporate governance helps companies build trust with investors and the community.
STRUCTURE OF CORPORATE GOVERNANCE IN INDIA
- The Companies Acts 2013
- SEBI (Securities and Exchange Board of India) Guidelines
- Accounting Standards issued by the ICAI
- Standard Listing Agreement of Stock Exchanges
- Secretarial Standards Issued by the ICSI
- Other Legislations, The Competition Act 2002; the Foreign Exchange Management Act,1999; the Industries (Development and Regulation) Act, 1951; & other legislations
Thus, taking the cognizance of the fact of protecting the interests of stakeholders of business organisation as well as to ensure sustainability and growth of business organisations, world over various forums came into existence, such as National
Foundation for Corporate Governance, Organisation for Economic Cooperation and Development (OECD), International Corporate Governance Network (ICGN) etc.
1. INSTITUTE OF COMPANY SECRETARIES OF INDIA (ICSI)
ICSI's Philosophy on Corporate Governance Corporate Governance as "the application of best management practices, compliance of law in letter and spirit and adherence to ethical standards for effective management and distribution of wealth and discharge of social responsibility for sustainable development of all stakeholders.
- Corporate Governance Research and Training and Centre of Excellence, Hyderabad.
- ICSI National Award for Excellence in Corporate Governance.
- Focus on Corporate Governance in the Course Curriculum.
- PMQ Course in Corporate Governance.
- Secretarial Standards.
- Corporate Governance Publications.
- Directors Development and Capacity Building Programmes.
- Investor Education and Awareness.
- ICSI Recommendations to Strengthen Corporate Governance Framework.
- National Policy on Corporate Governance.
- Customised Training Programme.
- Founder Trustee of National Foundation for Corporate Governance.
2.NATIONAL FOUNDATION CORPORATE GOVERNANCE (NFCG)
NFCG endeavours to build capabilities in the area of research in corporate governance and to disseminate quality and timely information to concerned stakeholders.
Objectives of NFCG
- To catalyse capacity building in new emerging areas of Corporate Governance.
- To further research, scholarship, and education in corporate governance in India.
- To foster a culture of good governance, voluntary compliance and facilitate effective participation of different stakeholders.
- To create a framework of best practices, structure, processes and ethics.
The internal governance structure of NFCG consists:
- Governing Council
- Board of Trustees
- Executive Directorate
3. ORGANIZATION FOR ECONOMIC CO- OPERATION AND DEVELOPMENT (OECD)
The Organisation for Economic Co-operation and Development (OECD) was established on 30th September 1961. The OECD was one of the first non government organizations to spell out the principles that should govern corporates. OECD Corporate Governance Principles are divided in six different chapters, which are:
- Ensuring the basis for an effective corporate governance framework
- The rights and equitable treatment of shareholders and key ownership functions
- Institutional investors, stock markets, and other intermediaries.
- The role of stakeholders in corporate governance
- Disclosure and transparency.
- The responsibilities of the board
- Disclosure and transparency
- The responsibilities of the board
4. THE INSTITUTE OF DIRECTORS (loD), UK
The IoD is a non-party-political business organisation established in United Kingdom in 1903. The loD seeks to provide an environment conducive to business success.
It acts as a unitary board and has the following powers and responsibilities:
- to manage the affairs and long-term success of the institute.
- to approve the strategy of the institute,
- to approve the annual report and accounts
- to appoint, reappoint and remove the director general
- to ensure open and transparent engagement with all stakeholders when carrying out its duties.
5. INTERNATIONAL CORPORATE GOVERNANCE NETWORK (ICGN)
ICGN's mission is to promote effective standards of corporate governance and investor stewardship to advance efficient markets and sustainable economies world-wide.
It has four primary purposes:-
- to provide an investor-led network for the exchange of views and information about corporate governance issues internationally;
- to examine corporate governance principles and practices;
- to develop and encourage adherence to corporate governance guidelines; and standards
- to generally promote good corporate governance.
ICGN Global Corporate Governance Principles are-
- Principle 1: Board role and responsibilities.
- Principle 2: Leadership and independence.
- Principle 3: Composition and appointment.
- Principle 4: Corporate culture
- Principle 5: Risk oversight.
- Principle 6: Remuneration.
- Principle 7: Reporting and audit.
- Principle 8: Shareholder rights
6. ASIAN CORPORATE GOVERNANCE ASSOCIATION (ACGA)
The Asian Corporate Governance Association (ACCA) is an independent profit membership organisation dedicated to working with investors companies and regulators in the implementation of effective corporate governance practices throughout Asia .
(1) Research: Tracking corporate governance developments across 11 markets in Asia and producing independent analysis of new laws and regulations, investor activism and corporate practices.
(2) Advocacy: Engaging in a constructive dialogue with financial regulators, stock exchanges, institutional investors and the implementation of better corporate governance practices in Asia.
(3) Education: Organizing conferences and seminars that foster a deeper understanding of the competitive benefits of sound corporate governance.
7. CORPORATE SECRETARIES INTERNATIONAL ASSOCIATION LIMITED (CSIA)
Corporate Secretaries International Association Limited (CSA) was established on February 10, 2017 as a Company limited by Guarantee in Hong Kong. CSIA is governed by a council consisting of the honorary members (President, Vice-President, Secretary and Treasurer as elected from the member bodies), past presidents, co-opted members and representatives of each national member organisation.
1. To promote the professional status of suitably qualified chartered secretaries, Corporate Secretaries, Company Secretaries, board secretaries and other governance professionals.
2. To establish and maintain good relations and exchanges between organisations dedicated to the promotion and practice of secretaryship and/or the promotion of good governance.
3. To develop and improve their services and professionalism of their members.
4. To assist in the creation of such organisations in countries or regions in which they do not currently exist.
5. To promote the growth, development, study and practice of secretaryship and assist their members develop and improve their services and professional standards.
6. To advocate for good governance through carrying out research developing standards and raising awareness.
8. INTERNATIONAL INTEGRATED REPORTING COUNCIL (IIRC)
The IIRC's mission is to establish integrated reporting and thinking within mainstream business practice as the norm in the public and private sectors. The IIRC's vision is to align capital allocation and corporate behaviour to wider goals of financial stability and sustainable development through the cycle of integrated reporting and thinking.
9. EUROPEAN CORPORATE GOVERNANCE INSTITUTE (ECGI)
The European Corporate Governance Institute (ECGI) was founded in 2002. It has been established to improve corporate governance through fostering independent scientific research and related activities.
The ECGI is an international scientific non-profit association. It provides a forum for debate and dialogue between academics, legislators and practitioners, focusing on major corporate governance issues and thereby promoting best practice.
10. CONFERENCE BOARD
- It works as a global, independent membership organization in the public interest, it conducts research, convenes conferences, makes forecasts, assesses trends, publishes information and analysis, and brings executives together to learn from one another.
- The Conference Board governance programs help companies improve their processes, inspire public confidence, and ensure they are complying with regulations.
Tags corporate law