Corporate Governance Practices in India by Priyanka Kaushik Sharma download in ePub, pdf, iPad
The independence of such promoter appointed independent directors is questionable as it is unlikely that they will stand-up for minority interests against the promoter. Specialist advice should be sought about your specific circumstances.
It acts as an oversight body for transparent, effective anti-fraud and risk management mechanisms, and efficient Internal Audit and External Audit functions financial reporting. Investors and shareholders of a corporate company need protection for their investment due to lack of adequate standards of financial reporting and accountability. The effective implementation of good governance practices would ensure investors confidence in the corporate companies which will lead to greater investment in them ensuring their sustained growth.
One way of dealing with the problem of insider trading is enacting legislation prohibiting such trading and enforcing criminal action against violators. The extent to which corporate enterprises observe the basic principles of good corporate governance has now become an important factor for attracting foreign investment. Family owned Indian companies suffer an inherent inhibition to let go of control. It is further provided that items contained in such financial statements shall be in accordance with the accounting standards.
Such remuneration and stock option is required to be disclosed in the annual report of the company. Many research reports published in recent years show that companies with good governance system have generated high risk-adjusted returns for their shareholders. The New Act has greater emphasis on corporate governance through the board and board processes.
This will help in winning investors confidence. Getting the Board Right Enough has been said on board and its role as the cornerstone for good corporate governance.
The Kumar Mangalam Birla Committee then suggested that for a company with an executive Chairman, at least half of the board should be independent directors, else at least one-third. Although these general duties have been imposed on all directors, directors including independent directors have been complacent due to lack of enforcement action. For achieving desired results, it is important that regulatory measures are modelled based on the practices and business environment in India. Regulatory framework on corporate governance The Indian statutory framework has, by and large, been in consonance with the international best practices of corporate governance. New regulatory institutions may need to be created, existing institutions strengthened and hybrid approaches adopted but, on the whole, the Anglo-Saxon model may well be a useful foundation.
Having said that, evaluation is always a sensitive subject and public disclosures may run counter-productive. This inherent conflict has a direct impact on independence. This Top Ten is not intended as a definitive statement on the subject addressed. This is inherently connected to the field of corporate governance. India has liberalised the regulatory fabric of the country to align its corporate governance norms with those of developed countries.
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