Professional Documents
Culture Documents
BE Case
BE Case
In the late 1980 and early 1990s, in lot of scandals and collapses occurred in
the corporate world which led shareholders and banks to worry about their
investments. Several companies such as Polly Peck, British and Commonwealth,
BCCI, and Robert Maxwell’s Mirror Group News International in UK which
experienced explosive growth in earnings ended the decade in a memorably disastrous
manner on account of poorly management business practices. It was in an attempt to
prevent this recurrence of such business failures that the Cadbury Committee under
the Chairmanship of Sir Adrian Cadbury was set up by the London Stock Exchange in
May 1991. The Committee submitted its report and associated ‘Code of Best
Practices’ in December 1992 laying down the methods of governance needed to
achieve a balance between the essential powers of the Board of Directors and their
report accountability.
The board should meet regularly, retain full and effective control
over the company and monitor the executive management
All directors should have access to the advice and services of the
CS, who is responsible to the board for ensuring that the board
procedures are followed and that applicable rules and regulations
are compiled with. Any question of the removal of the company
secretary should be a matter to the board as a whole.
C. Executive Directors
2. Audit Committee
3. Powers of Committee
The audit committee should look into the reasons for substantial default
to depositors, creditors, debenture holders and shareholders.
The committee should meet at least thrice a year, once before finalization
of annual accounts and once compulsorily every 6 months. Quorum
should be either two members or 1/3rd of audit committee, whichever is
higher, and there should be minimum two independent directors.
7. Shareholders committee
Composition
2 BOD Attendance
Member/chairman of other committees
No. of Board meetings and dates
Terms of reference
3 Audit Composition
Meetings and attendance
Terms of reference
Composition
4 Remuneration Attendance
Policy
Details of remuneration of all directors
Name of Non-Exe. Heading the committee
Name & designation of compliance officer
5 Shareholders No. of shareholders’ complaints received
Number no solved to the satisfaction of the
shareholders
No. of pending complaints
Location & time
Details regarding special resolution passed
in previous 3 AGMs
6 General Body Meeting Person who conducted the postal ballot
exercise
Proposal of special resolution if any
Procedure for postal ballot.
Materially significant party transactions
7 Disclosures which may have potential conflict with
interest of company
Accounting treatment, if adopted different –
with explanation
Non- compliance by company, penalties on
any matter related to capital market during
last 3 years.
Whistle blower policy
Half-yearly report to each shareholders
Quarterly results
Newspapers – results normally published
8 Means of Communication
Any website – where displayed
Official news releases
Presentation, if any, made to institutional
investors or to any analyst
AGM – date, time and venue
Financial calendar
Date of book closure
General Shareholder
9 Dividend payment date
Information Listing on stock exchanges
Stock code
Market price data – high, low during each
month.
Registrar and transfer agent
Share transfer system
Performance in comparison Distribution of shareholding
to broad-based indices such Dematerialization of shares and liquidity
10
as BSE Sensex, CRISIL Outstanding GDRs/ADRs/Warrant or any
Index, etc., convertible instruments, conversion date and
likely impact on equity
Plant locations
Address for correspondence
Shri N.R. Narayana Murthy Committee on
Corporate Governance
The Committee on Corporate Governance under the Chairmanship of
Shri N.R. Murthy has suggested some recommendations and salient features of
Revised Clause 49 of the Listing Agreement which are mentioned below:
2. The minimum gap between two board meetings has been reduced from
four to three months.
5. The clause requires the board to lay down a code of conduct for all board
members and the senior management of the company to compulsorily
follow.
6. Where money is raised through public issues, right issues, etc., the
company will have to disclose the uses/application of the funds according
to major categories:
a. Capital expenditure
b. Working capital
7. The company will have to publish in criteria for making the payments to
non-executive directors in its annual report.
The Naresh Chandra Committee
Section 2.3.8 of this report states that the Committee would also recommend
that the following mandatory recommendations in the report of the Naresh
Chandra Committee, relating to corporate governance, be implemented by
SEBI.
For all listed companies, there should be a certification by the CEO and CFO
which should state that, to the best of their knowledge and belief:
They have reviewed the Balance Sheet and P & L A/c and all its
schedules and notes on accounts, as well as the cash flow statements and
the Director’s report.
They have indicated to the auditors, the Audit committee and in the notes
on accounts, whether or not there were significant changes in internal
control and/or accounting policies during the year.