Corporate Governance at Hyundai

TATA MOTORS Vs HYUNDAI MOTORSPRESENTED BY:GROUP 5Abhishek PrasadJaskirat SinghMudita BhandariShubham SanghalSoochna SahuTarini EVishal Gupta

Corporate Governance in South KoreaPre-dominantly family-basedChaebols wield considerable control in various companies through both direct equity holding and cross-holding of sharesEast-Asian financial crisis of 1997 brought the issue of corporate governance to the fore-front in South KoreaThe investors suspicion about the transparency in corporate governance had particularly deepened with the large scale accounting frauds surfaced in the US and other countries of the world at the turn of the century. The Committee presented the revised code in 2003 which has attempted to harmonize the Code with the global standards and realities in the Korean context. The Code consists of five sections: Shareholders, Board of Directors, Audit Systems, Stakeholders, and Management Monitoring by the Market

Corporate Governance in IndiaIndian approach is drawn from the Gandhian principle of trusteeship and the Directive Principles of the Indian ConstitutionThe investor base in the Indian corporate market, for instance, largely consists of the company founders, their respective family members and the governmentThe Companies Bill 2012, passed by Lok Sabha on 18 December 2012, includes a number of new provisions aimed at improving the governance of public companiesThere has been a clear move in India to develop the corporate market to attract foreign investment. Foreign investment is slowly increasing shareholder diversity in some companies. This in turn pushes the agenda for the introduction of a regulated and universal corporate governance model

Corporate Governance at tataRich legacy of fair, ethical and transparent government practices.Compatible with international standards.Tata business excellence model | balance scorecard methodology | tata code of conductDepository program listed on NYSE.Won golden peacock award for excellence in corporate governance.Board 13 directors The committees of the board :Audit committeeRemuneration committeeInvestors grievance committeeFinance committee of directorsCommittee of boardEthics and compliance committee

Committees:Tofocus effectivelyon the issues and ensure expedientresolutionof the diverse matters, the Board has constitutedasetof Committees with specifictermsof reference/scope.Audit CommitteeRemuneration CommitteeInvestors Grievance CommitteeyFinance Committeeof DirectorsyCommitteeof BoardyEthics and Compliance Committee

Corporate Governance at HyundaiHyundai has enhanced corporate governance at the highest levels of the organization through addition of outside directors, the formation of an Ethics Committee including five external directors and two independent advisors, the establishment of an Ethics Charter and Employee Code of Conduct, and the adoption of Ethical Business Practice Guidelines all of which governs our people and operations globally, including in the U.S.Hyundai employees are trained in ethical business conduct and have established a Cyber Audit Office to monitor our compliance worldwide.Hyundai is basing earnings on the International Financial Reporting Standards (IFRS), replacing K-GAAP.Hyundai has implemented a voluntary fair trade compliance initiative.Hyundai has initiated a series of education programs to raise awareness of fair trade practices among our workforce and suppliers.Hyundai have instituted a mechanism for reporting suspected unfair business transactions, corruption or other violations.

Audit committeeThe Audit Directors comprises of three independent Directors.Reviewing the quarterly financial statements before submission to the Board.Reviewing with the management, external auditor and internal auditor, adequacy of internal control systems and recommending improvements to the management.Reviewing the adequacy of internal audit function, coverage and frequency of internal audit, appointment, removal, performance and terms of remuneration of the chief internal auditor.

The Audit Directors consists of four external directors.Duties include auditing the companys management and accounting, requesting business reports from executives, and monitoring the companys financial status.Internal systems to enable members' access to management information necessary for proper auditing are in place.

Remuneration committeeCompensation for directors was capped at KRW 15 billion at the 2011 General Shareholders Meeting. Total compensation for internal and external directors from 1 January to 31 December 2011 amounted to KRW 8.83 billion. Average compensation for internal directors was KRW 2.1 billion and KRW 86 million for external directors.The Members had, at the Annual General Meeting held on July 24, 2008, approved the payment of remuneration, of a sum not exceeding 1% per annum of the net profits of the Company, calculated in accordance with the provisions of the Act, for a period of 5 years commencing April 1, 2008.As per the terms of appointment, the remuneration of Managing Directors and Executive Directors comprises of (a) salary: upto a maximum salary of 6,75,000 per month for Mr Telang and 7,00,000 per month for the Executive Directors with authority to the Board or a Committee thereof to fix the salary within the said maximum amount.

Ethics committeeHyundai Motor Company established the Ethics Committee in 2007 to improve transparency of internal transactions and to ensure ethical management of the company. Ethical management and internal transaction restrictions were further reinforced in 2012 when the Committee was reorganized as a sub-committee of the BOD. The Ethics Committee consists of three external directors and one internal director. The chairmanship is held by an external director.

The Ethics and Compliance Committeewas constituted to formulate policies relating to the implementation of the Tata Code of Conduct for Prevention of Insider Trading (the Code), take on record the monthly reports on dealings in securities by the "Specified Persons" and decide penal action in respect of violations of the applicable regulations/the Code.uring the year under review, a meeting of the Committee was held on August 11, 2011.

Scandals -Cash for summit scandal In 2007, Chung Mong Koo, Hyundai chairman, was found guilty of fraud and embezzlement, having siphoned some $100 million into a slush fund allegedly to bribe officials. His trial was hailed as a victory for transparency and rule of law in South Korea but Chung's three-year jail term would be suspended, and in 2008 he received a full pardon from South Korean President Lee Myung Bak.Radia Tapes In 2010, Ratan Tatas name surfaced in countrys major 2G spectrum scam after his tapped telephonic conversation with corporate lobbyist Nira Radia came into public domain.

The Radia tapes also included controversial conversation with political and industrial bigwigs and journalists. Tata was one of the industrialists featured on the tapes.

Radia who was also interrogated in the 2G spectrum case, handled public relations for Tata group companies. Tata moved the Supreme Court filing defamation case against the publication for breaching his right to privacy.

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