Principles of Corporate Governance

Principles of Corporate Governance

• The rights of shareholders

• The equitable treatment of shareholders

• The role of stakeholders in corporate governance

• Disclosure and transparency

• The responsibilities of the board

FUNDAMENTAL ISSUES IN CORPORATE GOVERNANCE

• TRANSPARENCY IN RESPECT TO COMPANY AFFAIRS AND COMPLETE DISCLOSURE OF ALL ADVERSE FACTORS AFFECTING A COMPANY

• ACCOUNTABILITY OF DIRECTORS IN COMPLIANCE OF LAWS AND REGULATIONS

• FAIRNESS IN REPORTING OF ALL DEALINGS

• RESPONSIBILITY ON PART OF DIRECTORS FOR BUSINESS DEALINGS INCLUDING CULPABILITY OF PUNISHABLE OFFENCES eg CULPABILITY OF K.C.MAHINDRA IN UNION CARBIDE CASE (HOMICIDE DUE TO NEGLIGENCE?) AND ROLE OF AMRI DIRECTORS IN KOLKATTA

FOCUS OF CORPORATE GOVERNANCE

• ELECTION OF DIRECTORS BY SHAREHOLDERS(STATEMENT BY SWRAJ PAUL ON DCM AND ESCORTS)

• ACCOUNTABILITY OF DIRECTORS FOR DECISIONS TAKEN(PASSING THE BUCK GAME AT SATYAM-ONLY RAJU KNEW)

• ADOPTING ACCOUNTING STANDARDS AND INFO GIVEN TO BOARD (CLAUSE 49 ACCURACY,TRUTHFULNESS, TRACEABILITY AUTHORIZATION-SATYAM BALANCE SHEET HOW SIPHONED MONEY WAS ACCOUNTED AND AUDITED) )

• ADHERENCE TO LAWS AND REGULATIONS

CORPORATE GOVERNANCE CONSTITUENTS

• RISKS-MANAGEMENT SHOULD DISCLOSE ALL RISKS WHICH COMPANY FACES

• PROTECTION-SHAREHOLDER INTEREST SHOULD BE PROTECTED FAIRLY THRU MGT SHARE VALUE

• CONTROL OF MATERIAL TRANSACTIONS WITH RELATED PARTIES

• PREVENTION- OF FRAUDS AND MISSTATEMENTS

• TRANSPARENCY-FULL DISCLOSURE OF INFORMATION TO ENABLE SHAREHOLDERS TO EVALUATE MANAGERS

• DISCLOSURES- MATERIAL RELATED TRANSACTIONS AND CERTIFICATION OF CORRECTNESS OF FINANCIAL DATA

Sarbanes-Oxley (SOX) Act of 2002

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