It is a basic re-conceptualization of Corporate Governance based on three pillars that aims to eradicate the problems of current Corporate Governance Practices.

1. CORPORATE
GOVERNANCE 2.0
by Guhan Subramanian
Published -March 2015
Presented by
Sangita Lama
Soni Sahani
Roshan Pant
Nitesh Khatiwada
Aditya Kumar Jha

2. Content
• Definition of corporate governance
• Objectives of corporate governance
• Article review
• Variable discussed
• Findings
• Conclusion

3. Article Review
• Introduced in 1930s by Adolf Berle and
Gardiner Means
• Emerged only in 1970s
• Public and private policy makers conflict on
accepted metric of successful corporate
governance

4. Cont…..
• Corporate governance 2.0:
– Not quite a clean sheet redesign of current
system
– Back to basic re-conceptualization of what
should corporate governance means
– Based on three core principle to develop a
package solution for some current issues

5. Cont…..
The author has proposed three principles
Principle-1: Board should have the right to
manage the company for the long
term
Principle-2: Board should install Mechanisms
to ensure the best possible
people in the boardroom
Principle-3: Board should give shareholders
an orderly voice.

6. Cont…..
Principle-1:
Board should have the right to manage the
company for the long term.
– Managers are under pressure to meet quarterly
earnings
– Can’t focus on innovation
– Failure to disclosure is against corporate
governance
Corporate Governance 2.0: Long term goals,
market share, no of new products, percentage
revenue from new market

7. Cont…..
Principle-2:
Board should install mechanisms to ensure
the best possible people in the boardroom.
– Engage independent 3rd party for designing
process
– Grade directors on various company specific
attributes
– Evaluate contribution in relevant way
– Show the result to directors
– Have direct conversation
– Work Hard or not stand for re election

8. Cont…..
Principle-3:
Board should give shareholders an orderly
voice.
– Guarantee a reasonable process where
shareholders get to decide
– Directors defend their view,
but leave the decision to
shareholder
– Some shareholders are
undeniably disorderly

9. Variable discussed
Variables of discussion
• Board of Directors
• Management
• Shareholders

10. Major Regulation
Governing CG
• Corporate Governance Regulation in Nepal
– Banks and Financial Institutions Act-2063
– Banking Offence Act
– Companies Act-2063
– Various regulations issued by Security
Exchange Board of Nepal (SEBON)
– Directives and Circulars issued by Nepal Rastra
bank
– Various guidelines from Institute of Chartered
Accountants of Nepal (ICAN)

11. Institutions Amount
Nepal Development Bank
Samjhana Finance 510 Million
Gurkha Development Bank 130 Million
United Development 270.62 Million
Nepal Share Market 2.51 Billion
H&B Development Bank 1.09 Billion
Kist Bank 159.69 Million
General Finance 151.5 Million
Cristal Finance 501 Million
Nepal Sri Lanka Merchant
banking and Finance
297.86 Million
Himalayan Bank 532.29 Million
Major Frauds In Nepal
Total Financial fraud till date: 9.71 Billion
Republica 2014-09-11

12. Major Corporate
Governance Violence
• Enron (UK; 2001)
• Worldcom (USA; 2003)
• Sino-Forest Corporation (China; 2011)
• Olympus (Japan; 2012)
• News Corp (UK; 2010)
• Satyam (India; 2009)

13. Conclusion

14. Thank You