Corporate Governance is one of the important criteria for foreign institutional investors to decide on which company to invest in. The corporate practices in India emphasize the functions of audit and finances that have legal, moral and ethical implications for the business and its impact on the shareholders In this presentation i have collected all theories portion for the students as well as teacher

1. Corporate Governance
Ram Geer Yadav
BBA
RK University, Rajkot, India

2. Introduction
The framework of rules and practices by which a board of directors ensures
accountability, fairness, and transparency in a company's relationship with its all
stakeholders (financiers, customers, management, employees, government, and
the community).
In other words
Corporate Governance is a relationships among various participants in
determining the direction and performance of a corporation with the effective
management of relationships among (share holders, Employee, Customer,
Creditors, suppliers and community)

3. Requirement of corporate governance
• Better access to external finance
• Maintain the relationship of employer and employee in organization
• Lower costs of capital -Interest rates on loans/debenture
• To protect share holder interest
• Protect company from scam

4. Pillar of Corporate Governance
• Accountability
• Transparency
• Fairness
• Independent

5. Elements of Corporate Governance
• Good Board practise
• Control Environment
• Transparency discloser
• Well-defined share holder right
• Board commitment

6. Good Board practise
• There should be appropriate board procedure.
• There should be clearly defined all the roles and authorities among all the
members of organization.
• There should be understood the duties and responsibility of director in
organization
• Board should be well structured.
• There should be appropriate composition of mix skill.
• The remuneration of director line with best practise.
• Director should be self-evaluation and conduct training when there is needed

7. Control Environment
• There should be internal control Procedure in organization
• There should be risk management system in place
• There should be disaster recovery management in place
• Media management technique should be used
• Internal audit function
• Independent audit should be established
• Independent external auditor conduct audit
• There should be management information system
established

8. Transparency discloser
• There should be discloser of all the financial information
• There should be discloser all the non-financial information
• The accounting system should be prepare on the basis of IFRS
(Indian finance standard report)
• There should be filling of register up to date.
• There should be publish high quality annual report of organization

9. Well-Defined share holder right
• There should be formalised the minority share holder right.
• There should be well organised share holder metting.
• There should clearly define the dividend policy among all the
members and share holder.
• There should be voting right in general meeting
• There should be transfer share from one person to another person
• The right to sell their stock in market
• They have right to get information about the company

10. Board Commitment
• The board discuss the corporate governance issue and has created the corporate
governance commitee
• The company has corporate governance champaion which helps to solve the issue in
organization.
• The corporate governance improvement plan has been created
• The policy and procedure have been formalised and distributed to all the staff.
• The corporate governance code has been developed
• The code of ethics has been developed
• The company reconised as a corporate governance leader.
• The corporate governance applies in all the organisation either they are private,public or
non –profit organisation

11. Corporate Governance in India
• Corporate governance comes in India in 1956 according to companies
act.
• India has 20 million of share holder, which is one of the largest
emerging market in term of capitalisation.
• In 1996 (CII) Confedration of indian industry took special initatve on
corporate governance.
• It ia formed for the balanced the power and decision making between
board of director ,executive and share holder in Indian organisation
• According to CII it helps to protect the investor intrest, especially the
small investor, the promotion of transparency with the business and
industry

12. SEBI (Security & Exchange Board of India)
• The Government of India’s security , the security board announced a stricked governance rules and
regulation for all public listed company in India.
• The indian economy liberasied in 1991. In order to enable the investment from foreign investor it was
necessary to introduce a series of stock market
• On 12th April 1988 SEBI Established
• The main objective of SEBI is to protect right of small investor and regulating , developing stock
market
• In 1992 the BSE the leading stock in India witness the first major scam master minded by Harshad
Mehta
• When analysis done then they felt that if more power had given to SEBI then scam wouldnot be
happen on comming days
• In 1992 as per SEBI Act confered the statury report.
• Now a days the SEBI introduced in server stock in a market.

13. SEBI Clauses 49
• On Auguest 26, 2003 SEBI announced amended clauses 49 of the
listing the agreement which every public listed in Indian stock
exchange is required to sign
• As per SEBI clauses 49 , the agreement between the company and
the SEBI Act about the Indian exchange

14. The major changes to clause 49
• Independent Director.
The independent director are ½ or 1/3 depending whether chairman of board (
Executive or non-executive position)
• Non-executive Director.
The total term of Non-executive directors is now limited to 3 terms for 3 years.
• Board of Director
The board of director required code of conduct for all board member and senior
management and each of them have to annually affirm compliance with code.
• Audit Commitment
Financial statement and draft audit report of management discussion and analysis of
financial related in organisation

15. SEBI
• Subsidary companies
50% of non-executive directors and ½ or 1/3 independent director
are dependin on whether chair man is executive or non-executive.
• Whistle blower policy
This is the policy has to communicated to all the employee and
whistle blower should be treatment protected from unfair
treatment.

16. Corporate Governance Issues
• Performance evaluation of director.
• True independence director
• Removal of independent director
• Accountability to share holder
• Executive compensation
• Risk management
• Privacy and data protection
• Succession planning

17. Ram Geer Yadav
RK University, Rajkot,Gujrat , India
Email: ramgeer2012@gmail.com