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Essence of Corporate Governance

In general, the company’s corporate governance philosophy is to achieve the highest level of transparency, accountability and integrity. The true meaning of corporate governance is to satisfy the aspirations of all shareholders, customers, suppliers, leaders, employees, shareholders and the expectations of society. The Board of Directors endorses the broad principles of corporate governance and directs the organization’s action to achieve its promised goal of transparency, accountability and integrity.

Fundamental principles of corporate governance:

The basic objective of corporate governance is to maximize long-term shareholder value. Therefore, good governance must address all aspects that generate added value for the organization and serve the interests of all stakeholders.

Transparency:

Transparency means accurate, adequate and timely disclosure of relevant information to interested parties. Without transparency, it is impossible to move towards good governance. Business heads must realize that transparency also creates immense value for shareholders. Purpose, the exchange of information is prevented under the excuse of confidentiality. It is necessary to move towards international standards in terms of disclosure of information by the business sector and through all of this to develop a high level of public trust in business. Once a company has public participation, it is imperative that its commitment to financial transparency is complete. The Company is a trustee of investors’ money and this responsibility, in turn, requires full disclosure. Corporations in India must learn to work with transparency and impeccable integrity as these are the essential ingredients to maximize their wealth and the wealth of the nation. Transparency and disclosure are the pillars of corporate governance because they provide all stakeholders with the necessary information to judge whether their interests are being served.

Responsibility:

Corporate Governance: A Top Down Approach The Chairman, Board of Directors and CEOs must fulfill their responsibilities to make corporate governance a reality in Indian industry. In well-governed companies, accountability is not just from the bottom up, but also from the bottom up. A department head is responsible for all decisions made on behalf of his department. The accountant also furthers the goal of creating shareholder value.

Merit-based management:

A strong board of directors is needed to lead and support merit-based management. The board of directors should be an independent, strong and non-partisan body where the only motive should be decision-making through business prudence. Although corporate governance is much broader than business management, efficient and effective administration of the business sector is essential to meet the desired objectives. Corporate governance ensures that long-term strategic goals and plans are established and that the appropriate management structure is in place to achieve those goals, while ensuring that the structure functions to maintain the integrity, reputation and accountability of the company. company to its various stakeholders. Therefore, corporate governance involves the broad parameters of accountability and control of the information system.

Suggested list of elements to include in the Corporate Governance Report in the Annual Reports of Boards of Directors:

1. A brief statement about the company’s philosophy on the governance code.

2. Board of Directors (BOD):

– Composition and category of directors.
– Attendance of each director at the meetings of the Board of Directors and at the last Ordinary General Meeting.
– Number of other BODIES or Board Committees of which he is a member or chairman.
– Number of Board meetings held, dates on which they were held.

3. Audit Committee:

– Brief description of the terms of reference.
– Composition, names of members and president.
– Attendance meetings during the year.

4. Remuneration commission:

– Brief description of the terms of reference.
– Composition, names of members and president.
– Assistance during the year.
– Remuneration policy.
– Detail of the remuneration of all directors, according to the format in the main report.

5. Shareholders Committee:

– Name of the non-executive director who chairs the committee.
– Name and position of the compliance officer.
– Number of official compliance shareholders.
– Number of shareholder claims received to date.
– Number not resolved to the satisfaction of the shareholders.
– Number of pending share transfers.

6. General Body Meetings:

– Place and time, where the last Three Annual General Assemblies were held.
– If special resolutions were put to a postal vote last year, details of the voting pattern.
– Person who exercised the vote by mail.
– Procedure for postal bundle.

7. Disclosures:

– Disclosures about significant transactions with related parties, that is, company transactions of a material nature, with its promoters, directors, management, its subsidiaries or relatives, etc., that may have a potential conflict with the interests of the company usually.
– Details of non-compliance by the company with sanctions, structures imposed on the company by the stock exchange, SEBI or any statutory authority, in any matter related to the capital markets, during the last three years.

8. Media:

– Semi-annual report sent to each household of shareholders.
– Quarterly results on which website, where they are displayed.
– Where it also shows official press releases.
– Presentations made to institutional investors or analysts.

9. General shareholder information:

– Annual general meeting: date, time and place – Financial calendar – Closing date of the book – Date of payment of dividends – Listing on stock exchanges – Share code – Market price data: – Maximum minimum during each month in the last fiscal year. Performance compared to broad-based indices such as BSE Sensex, CRISIL Index, etc.,
– Registrars and Commercial Agents: Share transfer system – Distribution of Share holdings – Dematerialization of shares and liquidity – Outstanding guarantees or any convertible instrument, date of conversion and probable impact on capital – Locations of plants – Address for correspondence.

Future of Corporate Governance:

Today, more and more progressive companies are developing and enforcing codes of conduct and accepting higher accounting standards than the law requires. These trends would be further strengthened by a variety of forces such as deregulation of economic reforms, disintermediation of financial sector reforms, institutionalization of capital markets, globalization of financial markets, and tax reforms for investment transactions. block money.

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