Essence of corporate governance

Generally, the company’s corporate governance philosophy is to achieve the highest level of transparency, accountability and integrity. The true meaning of corporate governance is meeting the aspirations of all battery holders, customers, suppliers, leaders, employees, shareholders, and the expectations of society. The Board of Directors supports the general principles of corporate governance and directs the organization’s action to achieve its promised objective 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 issues that create added value for the organization and serve the interests of all stakeholders.

Transparency:

Transparency means the accurate, adequate and timely disclosure of relevant information to interested parties. Without transparency, it is impossible to move towards good governance. Business leaders must realize that transparency also creates immense shareholder value. But, the exchange of information is hampered under the guise of confidentiality. It is necessary to move towards international standards in terms of information disclosure by the business sector and, through all this, develop a high level of public trust in companies. Once a company has a public stake, 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 impeccable integrity and transparency 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 information necessary to judge whether their interests are being served.

Responsibility:

Corporate governance a top-down approach, the president, board of directors and chief executives must fulfill their responsibilities to make corporate governance a reality in Indian industry. In well-governed companies, accountability is not just bottom-up, it also follows the reverse order. 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 necessary to lead and support merit-based management. The board had to be an independent, strong and non-partisan body where the sole motive should be to make decisions through business prudence. Although corporate governance is much broader than corporate management, efficient and effective management of the business sector is essential to achieve 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 with its various stakeholders. Therefore, corporate governance involves the general parameters of accountability and control of the reporting system.

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

1. A short statement on the company’s philosophy on the government code.

2. Board of Directors (BOD):

– Composition and category of directors.

– Attendance of each director at the meetings of the Board of Directors and the last Annual General Meeting.

– Number of other BODS or Board Committees of which he is a member or president.

– Number of BOD meetings held, dates on which they were held.

3. Audit Committee:

– Brief description of the terms of reference.

– Composition, names of the members and president.

– Attendance meetings during the year.

4. Remuneration committee:

– Brief description of the terms of reference.

– Composition, names of the members and president.

– Assistance during the year.

– Remuneration policy.

– Detail of the remuneration of all directors, according to the format of the main report.

5. Shareholders Committee:

– Name of the non-executive director who chairs the committee.

– Name and designation of the compliance officer.

– Number of shareholder compliance officer.

– Number of shareholder complaints received so far.

– Number not resolved to the satisfaction of the shareholders.

– Number of pending transfer of shares.

6. Meetings of the general body:

– Place and time, where the last Three Annual General Meetings were held.

– If special resolutions were submitted to a postal vote last year, details of the voting pattern.

– Person who carried out the postal voting exercise.

– Postal voting procedure.

7. Disclosures:

– Disclosures on transactions with related parties of material importance, that is, transactions of the company 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 in general.

– Details of breaches by the company of sanctions, structures imposed on the company by the stock exchange, SEBI or any statutory authority, in any matter related to capital markets, during the last three years.

8. Media:

– Semiannual report sent to each household of shareholders.

– Quarterly results on which website, where it is displayed.

– Where it also shows official press releases.

– Presentations made to institutional investors or analysts.

9. General information for shareholders:

– Annual general meeting: date, time and place – Financial calendar – Date of closing of the book – Date of payment of dividends – Listing on stock exchanges – Stock code – Market price data: – Maximum minimum during each month of the last fiscal year financial. Performance compared to broad-based indices like BSE Sensex, CRISIL Index, etc.

– Registrar and Commercial Agents: Share transfer system – Share holding distribution – Dematerialization of shares and liquidity – Warrants in force or any convertible instrument, conversion date and probable impact on equity – Plant locations – 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 is required by law. These trends would be reinforced 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 fiscal reforms for monetary transactions in block.