CORPORATE GOVERNANCE : CONCEPT & IMPORTANCE

PRESENTED BY SHARDUL & KAMLESH

Corporate governance is a system by which companies are run. It relates to the set of incentives, safeguards and the dispute resolution process. Corporate governance is a system by which companies are directed and controlled. Cadbury Committee (U.K.) Corporate governance relates to laws, procedures, practices and implicit rules that determine a companies ability to take improved managerial decisions.

Fundamental principles of corporate governance 1.Transparency: without transparency ,it is impossible to make any progress towards good governance. 2.Accountability: Corporate governance has to be top-down approach. 3.Merit-based management: A strong BoD is necessary to support merit based management. Major players for corporate governance 1.external. 2.internal

SUGGESTED LIST OF ITEMS TO BE INCLUDED IN THE REPORT ON CORPORATE GOVERNANCE IN THE ANNUAL REPORT OF COMPANIES
1.A brief statement on companies philosophy on code of governance. 2.Board of Directors: =>Category of directors for exa. Promoters , executives. =>Attendance of each directors at the BoD meetings. =>No. of BoD meetings held and dates on which held. 3.Audit committee: =>Composition ,name of members and chairperson. =>meetings and attendance during the year. 4.Remuneration committee: =>Composition ,name of members and chairperson. =>Attendance during the year. =>remuneration policy.

5.Shareholders committee. =>Name of designation of compliance officer. =>No. of shareholders complaints received so far. =>No. not solved to the satisfaction of shareholders. 6.disclosers. =>Disclosures on materially significant related party transactions, i.e., transactions of the company of material nature, with its promoters, the directors or the management, their subsidiaries or relatives etc. =>details of non-compliance by the company, penalties. 7.Means of communication: =>Quarterly results. =>Any web-site, where displayed. =>The presentation made to institutional investors or the analysts. =>which newspapers normally published in.

General shareholders information: =>AGM: date, time and venue. =>Financial calendar. =>Dividend payment date. =>Listing on stock exchanges. =>Plant locations. =>Address for correspondence.

CII code of corporate Governance The CII issued in 1997 a comprehensive code titled Desirable Corporate A code .The silent features of the code are given below 1 .The key to good corporate governance is well functioning board of directors .The board should have core group of excellent ,professionally acclaimed non executive directors who understand their dual role of appreciating the issues put forward by management . 2 .No single person should hold directorship in more than 10 companies at a time. 3 .Non executive Directors must be active with clearly defined responsibilities. 4 .Directors who have not been present for at least 50 % of the board meetings should not be reappointed. 5 .Non executive directors should be paid commission and offered stock option for their professional inputs in addition to their sitting fees. 6 .All key information must be placed before directors. 7.An audit committee comprising at least three non executive directors should be constituted and given access to all financial information.

 CONCLUSION
Corporate governance is broad term which is used to refer to a range of corporate controls and accountablity mechanism designed to meet the aims of all the stakeholders . It is the process of direction, supervision and accountability of corporations. It concerns the theories and practices of board of directors and its relationship with the shareholders of the company.