business ethics - cg

8/8/2019 Business Ethics - Cg

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BUSINESS ETHICSPresentation on

CORPORATE GOVERNANCE


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Team Members

Arpan Paul 128

Pratiyush kumar 146 Saurabh Aggarwal 159

Shruti Goel 163

Suruchi Sharma 170 Shafali Jain 103


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Presentation Outline

Concepts and Overview of Corporate

Governance

Benefits of Corporate Governance

Evolution of Corporate Governance in India


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Some Definitions

Corporate Governance is the system by whichcompanies are directed and controlled

--- Cadbury Report (UK), 1992

Corporate governance involves a set of relationshipsbetween a companys management, its board, its

shareholders and other stakeholders ..also the

structure through which objectives of the company

are set, and the means of attaining those objectives

and monitoring performance are determined.

-- Preamble to the OECD Principles of CG , 2004


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An Indian Definition

fundamental objective of corporate

governance is the enhancement of the long-

term shareholder value while at the same

time protecting the interests of other

stakeholders.

SEBI (Kumar Mangalam Birla) Report on Corporate

Governance, January, 2000


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Purpose of corporate

Governance : CG answers the basic question in

economics , i.e. how do we allocate

scarce resources to the most effective

uses.

Adam Smith talks about two kinds of

people what he calls principals,

people who have all the money ,more

money than ideas then agents

people who have all the ideas , more

ideas than money people who

undertake activities.


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Contd.

The purpose of CG andthe purpose of

boardofdirectorsofa corporationisto beintermediaries andtofigure out howto

allocate ,howto best allocate the money, the

resources, the capital that belongstotheprincipalstothe best activitiesthe activities

thatwill contribute to mostvalue tothe

society.


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Concepts

Corporate Governance is a setofsystems,

processes and principleswhich ensure that acompany isgovernedinthe bestinterestofall

stakeholders. Itisthe system by which

companies are directed and controlled. Itisabout promoting corporate fairness,

transparency and accountability. Inother

words, 'good corporate governance' issimply

'good business'


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Corporate Governance Structure


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It Ensures:

Adequate disclosures and

effective decision making to

achieve corporate objectives.

Transparency in businesstransactions.

Statutory and legal compliances;

Protection of shareholderinterests.

Commitment to values and

ethical conduct of business.


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Objectives

A properly structured board capable of taking

independent and objective decisions is inplace at the helm of affairs

The board is balance as regards the

representation of adequate number of non-

executive and independent directors who will

take care of their interests and well-being of

all the stakeholders;


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Contd

The board adopts transparent procedures and

practices and arrives at decisions on the strength of

adequate information;

The board has an effective machinery to sub serve

the concerns of stakeholders;

The board keeps the shareholders informed of

relevant developments impacting the company;


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Contd

The board effectively and regularly monitors

the functioning of the management team;

The board remains in effective control of the

affairs of the company at all times.

Its objective is to generate an environment of

trust and confidence amongst those having

competing and conflicting interests.


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The Benefits of Corporate

Governance It contributes not only to the efficiency of a

business enterprise, but also, to the growth

and progress of a country's economy.

Corporations need to access global pools of

capital as well as attract and retain the best

human capital from various parts of the world


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Contd

Well governed companies mitigate non-business

risks .

Increase efficiency of their activities and minimizerisks.

Get an easier access to capital markets and decrease

the cost of capital;

Increase growth rate;

Attract strategic investors;

Strengthen their reputation and raise the level of

investors and clients' trust.


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Regulators for Corporate

Governance Ministry of Corporate Affairs (MCA)

Securities and Exchange Board of India (SEBI)

The Institute of Chartered Accountant of India (ICAI)

The Institute of Company Secretaries of India (ICSI)

The Institute of Cost & Works Accountants Of India(ICWAI)


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Evolution of Corporate Governance

in IndiaIn India, corporate governance initiatives

have been undertaken by the Ministry of of

Corporate Affairs (MCA) and the Securities

and Exchange Board of India (SEBI). The first

formal regulatory framework for listed

companies specifically for corporategovernance was established by the SEBI in

February 2000, following the

recommendations of Kumarmangalam Birla

Committee Report.


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Contd In India, corporate governance initiatives have

been undertaken by the Ministry of of

Corporate Affairs (MCA) and the Securities

and Exchange Board of India (SEBI). The first

formal regulatory framework for listed

companies specifically for corporategovernance was established by the SEBI in

February 2000, following the

recommendations of Kumarmangalam Birla

Committee Report.


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Contd February 2000: Clause 49 introduced pursuant

to KM Birla Report.

The Ministry of Corporate Affairs had

appointed a Naresh Chandra Committee on

Corporate Audit and Governance in 2002 inorder to examine various corporate

governance issues.


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Contd It made recommendations in two key aspects

of corporate governance: financial and non-

financial disclosures: and independent

auditing and board oversight of management.

It is making all efforts to bring transparency inthe structure of corporate governance

through the enactment of Companies Act and

its amendments.


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THANK YOU

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