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  • Corporate Governance Framework in India

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    Rahul Shah
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    This document discusses corporate governance frameworks and key influencers such as shareholders, stakeholders, stock exchanges, lenders, regulators, and the media. It notes that common goals include transparency, accountability, fairness, and responsibility. It also examines lessons from the financial crisis regarding risk management, independent boards, and shareholder rights. The role of boards in providing strategic guidance, oversight, and management changes is outlined. Shareholder activism and rights including participation in decisions and voting are described. The importance of institutional shareholder engagement through dialogue, influencing culture, and raising social issues is highlighted with examples from India.

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    Describes the Corporate Governance Framework in India and the complexities

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    This document discusses corporate governance frameworks and key influencers such as shareholders, stakeholders, stock exchanges, lenders, regulators, and the media. It notes that common goals include transparency, accountability, fairness, and responsibility. It also examines lessons from the financial crisis regarding risk management, independent boards, and shareholder rights. The role of boards in providing strategic guidance, oversight, and management changes is outlined. Shareholder activism and rights including participation in decisions and voting are described. The importance of institutional shareholder engagement through dialogue, influencing culture, and raising social issues is highlighted with examples from India.

    Copyright:

    © All Rights Reserved
    Scarica in formato PDF, TXT o leggi online su Scribd
    Segnala contenuti inappropriati
    56 visualizzazioni6 pagine

    Corporate Governance Framework in India

    Caricato da

    Rahul Shah
    This document discusses corporate governance frameworks and key influencers such as shareholders, stakeholders, stock exchanges, lenders, regulators, and the media. It notes that common goals include transparency, accountability, fairness, and responsibility. It also examines lessons from the financial crisis regarding risk management, independent boards, and shareholder rights. The role of boards in providing strategic guidance, oversight, and management changes is outlined. Shareholder activism and rights including participation in decisions and voting are described. The importance of institutional shareholder engagement through dialogue, influencing culture, and raising social issues is highlighted with examples from India.

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    © All Rights Reserved
    Scarica in formato PDF, TXT o leggi online su Scribd
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    di 6

    TheCorporateGovernanceFramework

    18September2012

    Corporate Governance Framework

    KeyInfluencers

    Shareholders

    OtherStakeholders
    (NGO,employees,
    etc)

    Stock
    Exchanges/Listing
    Agreements

    Lenders
    (Bank/Depositors)

    InstitutionalInvestors

    Regulators(SEBI/RBI)

    Press/Media

    CommonGrounds:Transparency,Accountability,Fairnessand
    Responsibility

    TheCorporateGovernanceLessonsfromthe
    FinancialCrisis
    Widespreadfailure
    ofriskmanagement

    Boardsthatare
    capableofobjective
    andINDEPENDENT
    judgement

    Exerciseof
    ShareholderRights
    BasedonOECDresearchoncorporategovernanceweaknessesduringFinancialCrisis 2009
    Thereviewofriskmanagement,boardpracticesandtheexerciseofshareholderrights
    provideforagoodbasisbutthechallengeistoencourageandsupporteffective
    implementationofthesestandards.

    The Role of Board in sustainable,effectiveCorporate


    Governance
    Notonlycompliance
    focusedbutalso
    evaluateoutput
    measures.

    Separationof
    management&
    governancerights

    Board Basic
    responsibilitytoprovide
    strategicguidance&
    oversightregarding
    managementdecisions,
    andselecting&changing
    themanagement
    whenevernecessary.

    Composition,its
    agenda,decision
    makingandabilityto
    continuously
    improve

    Shareholder activism
    Ashareinacompanyisnotonlyashareinprofitsbutalsoashareinownership.
    Shareholdersmustrealizethattheiractiveparticipationinthecompanysoperations
    ensuresbettermanagement,lessfraudsandbettergovernance.

    VariousrightsundertheCompaniesAct,1956includingLegalProtectionsuchas:
    Righttoparticipatein,andtobe
    sufficientlyinformedon,
    decisionsconcerning
    fundamentalcorporatechanges

    Opportunitytoparticipate
    effectivelyandvoteingeneral
    shareholdermeetings

    Exerciseofownershiprightsby
    allshareholders,including
    institutionalinvestors,shouldbe
    facilitated.

    TheroleofShareholdersinCorporateGovernance
    Establishingdialoguewith
    themanagementonissues
    thatconcernthem

    Usingcorporatedemocracy
    providedbylaw&
    influencingthecorporate
    culture

    Increasinggeneral
    awarenessonsocial&
    humanrightsissues
    concerningtheorganization

    Amanagementthatknowsthatitwillbequestionedandheld
    responsibleforitsactions,isalwaysonitsfeet.

    Institutional shareholder activism in India a wake


    up call
    TheChildrensInvestment
    Fund(TCI)

    Withastakeofonly1.01%inCIL,forthefirsttimeinIndian
    corporatehistoryaninstitutionalinvestorthreatenedtosue
    individualBoardmembersofalistedentityforproposingto
    sellcoaltopowercompaniesatsubsidisedprices.

    In2010,SEBIcameoutwith
    Foreigninstitutionalinvestorsown~18%anddomestic
    guidelinesthatmandated
    Indianmutualfundstoreport
    institutionalinvestorsown~11%ofthetop500
    theirvotingatshareholder
    companies.
    meetings.

    Growinginstitutional
    shareholdersactivism

    Akzo NobelIndia:Thougheventuallypassed,thepostvote
    analysisshowsifthoseinstitutionswhoAbstainedhadcast
    theirvoteAgainst,itwouldhavedefeatedtheresolutionfor
    amalgamationof3unlistedentitieswiththelistedentityand
    setaprecedent.
    VedantaRestructuring:Manyinstitutionalshareholdersare
    reportedtohaveprotestedagainsttherestructuringexercise
    thatsawthemergerofSesa GoaandSterlite Industries.

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