1. CORPORATE GOVERNANCE

2. Corporate Governance
"Corporate governance is about maintaining an
appropriate balance of accountability between three
key players: the corporation's owners, the directors
whom the owners elect, and the managers whom the
directors select.
Accountability requires not only good transparency, but
also an effective means to take action for poor
performance or bad decisions."

3. Corporate Governance
Corporate governance is about commitment to
values and ethical business conduct.
It is about how an organization is managed.
This includes its corporate and other structures,
its culture, policies and the manner in which it
deals with various stakeholders.

4. Corporate Governance
Accordingly, timely and accurate disclosure of
information regarding the financial situation,
performance, ownership and governance of the
company is an important part of corporate
governance.
This improves public understanding of the structure,
activities and policies of the organization.
Consequently, the organization is able to attract
investors, and enhance the trust and confidence of
the stakeholders

5. Corporate Governance
– Set of mechanisms used to manage the
relationships (and conflicting interests) among
stakeholders, and to determine and control the
strategic direction and performance of
organizations (aligning strategic decisions with
company values)
Effective CG interest to nations as it reflects
societal standards

6. Corporate Governance
“ An internal system encompassing policies, processes and
people, which serves the needs of shareholders and other
stakeholders, by directing and controlling management
activities with good business objectivity, accountability and
integrity.
It is a system of structuring, operating and controlling a
company with a view to achieve long term strategic goals to
satisfy shareholders, creditors, employees, customers and
suppliers, and complying with the legal and regulatory
requirements, apart from meeting environmental and local
community needs.

7. Corporate Governance
The perceived quality of a company's corporate
governance can influence its share price as
well as the cost of raising capital.
Sound corporate governance is reliant on
external marketplace commitment and
legislation, plus a healthy board culture which
safeguards policies and processes.

8. Corporate Governance in India
In India, the Confederation of Indian Industry (CII) took
the lead in framing a desirable code of corporate
governance in April 1998.
This was followed by the recommendations of the
Kumar Mangalam Birla Committee on Corporate
Governance.
This committee was appointed by the Securities and
Exchange Board of India (SEBI).
The recommendations were accepted by SEBI in
December 1999, and are now incorporated in Clause
49 of the Listing Agreement.

9. Corporate Governance in India
SEBI also instituted a committee under the
chairmanship of N. R. Narayana Murthy which
recommended enhancements in corporate
governance. SEBI has incorporated the
recommendations made by the Narayana
Murthy Committee on Corporate Governance
in clause 49 of the Listing Agreement. The
revised clause 49 was made effective from
January 1, 2006.

10. Principles of corporate governance
Rights and equitable treatment of shareholders:
Organizations should respect the rights of shareholders
and help shareholders to exercise those rights.
They can help shareholders exercise their rights by
effectively communicating information that is
understandable and accessible and encouraging
shareholders to participate in general meetings.

11. Principles of corporate governance
Interests of other stakeholders:
Organizations should recognize that they have
legal and other obligations to all legitimate
stakeholders.

12. Principles of corporate governance
Role and responsibilities of the board:
The board needs a range of skills and
understanding to be able to deal with various
business issues and have the ability to review
and challenge management performance.
It needs to be of sufficient size and have an
appropriate level of commitment to fulfill its
responsibilities and duties.

13. Principles of corporate governance
Integrity and ethical behavior:
Ethical and responsible decision making is not
only important for public relations, but it is also
a necessary element in risk management and
avoiding lawsuits.
Organizations should develop a code of conduct
for their directors and executives that
promotes ethical and responsible decision
making.

14. Principles of corporate governance
Disclosure and transparency:
Organizations should clarify and make publicly known
the roles and responsibilities of board and
management to provide shareholders 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.

15. corporate governance controls
INTERNAL
• Monitoring by the board of directors
• Internal control procedures and internal
auditors
• Balance of power

16. corporate governance controls
EXTERNAL
• competition
• demand for and assessment of performance
information (especially financial statements)
• government regulations
• labour market
• media pressure