csr corporate governance

8/13/2019 CSR Corporate Governance

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CorporateGovernance


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Meaning

Corporate Governance may be

defined as the set of rules,

regulations, procedures andpractices to be adopted by a

firms management to manage

its affairs in the best interest of

its stakeholders.


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Factors of Corporate Governance

The Commitment of the Board of Directors

and Management towards Integrityand

Transparency in business operations

The Legaland Administrativeframework of

the Government


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The Objective of Corporate

Governance

The enhancement of shareholder value,

keeping in view the interests of other

stakeholders


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Aspects of Corporate Governance

The Corporate Governance code of each country

has to be designed keeping in view the

peculiarities of the country

With the integration of India into the world market(WTO), companies will have to give greater

disclosures, more transparent explanation for

major decisions and better corporate value Corporate Governance extends beyond Corporate

Law


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Reasons for Growing Interest

The assertion of rights by the shareholders

Growth opportunities resulting from

Globalization

Presence of Foreign Financial Investors

Greater Accountability

International standards of disclosures and

practices


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Reasons for Growing Interest

Strategic alliances with global players

Need to comply with the statutory authorities

such as SEBI in India

Business Combinations (to protect the

interest of concerned parties)


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Board of Directors

andCorporate

Governance


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Composition of the Board

Board shall have optimum combination of executiveand non-executive directors with not less than 50%

of the directors comprising of non-executive

directors.

The number of Independent Directors would dependupon whether the Chairman in executive or non-

executive.

In case of a non-executive chairmanat least one-

third of boardIndependent Directors

In case of an executive chairmanat least half of

boardIndependent Directors


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Remuneration of Directors

The Remuneration of non-executive directors shall

be decided by the Board.

Disclosures of remuneration in Corporate

Governance Report: All elements of remuneration packagesalary,

benefits, bonuses, pensions etc.

Fixed and performance linked incentives with criteria

Service contracts, notice period, separation fees etc.

Stock option details


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Board procedure

At least four meetings with maximum timegap of four months

The director of a company shall not be a

member in more than 10 committees or actas chairman of more than 5 committeesacross all companies.

Mandatory to inform about positions

For limits only Public Ltd companies andthree committeesAudit, ShareholdersGrievance and Remuneration Committee


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Role of the BoardAreas of Monitoring

Strategic Planning

Capital Allocation

Manpower Planning

Performance Appraisal


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Information to Shareholders

Appointment of New Director or

Reappointment

Brief resume

Nature of his expertise in specific functional

areas

Name of companies in which he holds

directorship and the membership ofcommittees of the board


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Information to Shareholders

Quarterly results, presentation made by

companies to analysts should be put on

companys web-site or should be sent in such

a form so as to enable the stock exchange onwhich the company is listed to put it on its

own web-site

Formation of Shareholders/InvestorsGrievance Committee under the

Chairmanship of non-executive director


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Tests of Corporate Governance

Whether the funds of the company have beendeployed for pursuing the main objects of thecompany as enshrined in the Memorandum

Whether the funds raised form financialinstitutions and the capital market have beenutilized for the purpose for which they wereintended.

Whether the company has the corecompetence to effectively manage itsdiversifications


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Whether there has been diversion of funds by

way of loans and advances or investments to

subsidiary or investment companies

Whether the personal property of thedirectors have been let out at exorbitant rent

to the company

Whether the provisions of the CompaniesAct, FEMA, the Factories Act and other

statues are complied with in letter and spirit


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Whether the funds of the company have beendiverted to the promoters through shellcompanies to permit the promoters to shore

up their stake in the company for privategains of the promoters

Whether the practices adopted by thecompany and its management towards its

shareholders, customers, suppliers,employees and the public at large are ethicaland fair


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Whether the directors are provided with information

on the working of the company and whether the

institutional and non-executive directors play an

active role in the functioning of the companies

Whether the internal controls in place are effective

Whether there is transparent financial reporting and

audit practices and the accounting practicesadopted by the company are in accordance with

ICAI accounting standards


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Corporate Governance Report

(Under Clause 49 of Listing Agreement)

A brief statement on company's philosophy

on code of governance

Board of Directors:

Composition and categorypromoter,

executive, independent, nominee etc.

Attendance of each director ( BOD meetings

and last AGM)

Member of other Boards and committees


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Audit Committee:

Brief description of terms of reference (role)

Composition, name of members and

Chairperson

Meetings and attendance during the year


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Remuneration Committee

Brief description of terms of reference

Composition, name of members and

chairperson

Attendance during the year

Remuneration policy

Details of remuneration to all the directors


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Shareholders Committee

Name and non-executive director heading thecommittee

Name and designation of compliance officer Number of shareholders complaints received

so far

Number not solved to the satisfaction ofshareholders

Number of pending share transfers


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General Body Meetings

Location and time, where last three AGMs

were held

Whether special resolutions were put through

postal ballot last year, details of voting

pattern

Procedure for postal ballot


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Disclosures

Disclosures on materially significant related

party transactions

Details of non-compliance by the company,

penalties, strictures imposed on company by

SEBI, stock exchange or any other authority

or any matter related to capital market duringthe last three years


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Means of Communication

Half-yearly report sent to each household

shareholders

Quarterly results

Newspapers

Website

The presentations made to institutional

investors and/or the analysts


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General Shareholder Information

AGM: Date, time and venue

Financial Calendar

Dividend payment date

Listing on Stock Exchanges

Stock Code Number

Market Price Data: High, Low during each

month in the year


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General Shareholder Information

Performance in comparison to broad-basedindices such as BSE, Sensex etc.

Registrar and Transfer Agents Share Transfer System

Distribution of Shareholding

Outstanding GDRs/ADRs/Warrants Plant locations

Address for correspondence


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Concept in Nut Shell

Transparency in disclosure of information and

decision making

Accountability, which follows transparency

because responsibilities could be fixed easilyfor actions taken or not taken

Equity of treatment to all shareholders,

whether large or small

csr corporate governance

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