Sumesh karat 113242 sec----B

CORPORATE GOVERNANCE

By Sumesh Karat

Corporate governance is considered with holding the balance between economic and social goals and between individual and company goals. The governance framework is there to encourage the efficient use of resources and equally to require accountability for the steward-ship of those resources. The aim is to align as nearly as possible the interests of individuals, corporations and society.- Sir Adrian Cadbury

Introduction

Requires timely and accurate disclosures on all materials relating to a company i.e. financial position, performance, ownership, etc. Objective- Compliance with corporate laws and rules on the legislative side and proper accountability to the stakeholders, legally and morally. Aims at achieving long term shareholders value and protecting interests of other stakeholders like suppliers, customers, creditors, bankers, employees, government and the society.

Authorities Involved In Corporate Governance In India

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The authorities involved in corporate governance in India are The Central Government Securities Exchange Board of India(SEBI) The Institute of Chartered Accountants of India(ICAI)

The Central Government

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Measures have been taken for effective corporate governance by incorporating appropriate legislative provisions in the Companies Act,1956 Provisions for better corporate governance Laying before company, annual and balance sheet Form and contents of balance sheet and profit and loss account Boards report. Appointment, removal, qualifications, duties etc of the auditors Power of Central Government to direct special audit in certain cases

Securities Exchange Board of India (SEBI)

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Effective corporate governance is made in the listing agreements of each stock exchange. Clause 49 provided for the following: Board of directors Audit Committee Remuneration of Directors Board Meetings Directors report Disclosure to shareholders Compliance Certificate

The Institute of Chartered Accountants of India (ICAI)

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The ICAI has issued 29 accounting standards to bring uniformity in terminology, approach, presentation and full disclosure of accounting results. Accounting standards help in corporate governance Segment reporting Related Party Disclosures Earning per Share Consolidated Financial Statements Discontinuing Operations

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