Report of kumara mangalam Birlacommitee on corporate governance : Report of kumara mangalam Birlacommitee on corporate governance Presented by
S.Saranya Definition of corporate governance : Definition of corporate governance Gabrielle O'Donovan defines corporate governance as 'an internal system encompassing policies, processes and people, which serves the needs of shareholders and other stakeholders, by directing and controlling management activities with good business savvy, objectivity, accountability and integrity An Indian Definition : An Indian Definition Fundamental objective of corporate governance is the ‘enhancement of the long-term shareholder value while at the same time protecting the interests of other stakeholders.”
SEBI (Kumar Mangalam Birla) Report on Corporate Governance. Key constituents : Key constituents Shareholders
Board of directors
CorporateGovernance involves promoting
Transparency-Everything happens in the company,if it is not shy to share it publicity,it is transparent.
Accountability-The management is accountable in its decisions.
Equanimity-Rights of all share holders are equal regardless of major or minor share holders. Global Initiative : Global Initiative Number of commitees are appointed to see corporate governance
Sri adrian cadbury committee on corporate governanace(1992).
Blue Ribbon commission report(2000)
Kumara mangalam Birla committee(1999)
Naresh chandra committee(2002)
Narayanan murthy committee report(2003) objectives of corporate governance : objectives of corporate governance Enhancement of shareholder value keeping in view the interest of another stake holder.
The committee is in firm view that the best results would be achieved when companies begin to treat the code not as a mere structure but as a way of life.
The extent of disicipline,transparency,willingness nad fairness are considered important to achieve goals. Importance of corporate governance : Importance of corporate governance Corporate governance shape the growth and future of any capital market and economy.
Instrument of investor protection
Relates to the issue of insider trading.
The issue of corporate governance involves besides share holders,all other stake holders.
At the heart of committee’s report is the sset of recommendations. Constitution of committee : Constitution of committee Raising standrad of corporate governance.
To suggest suitable amendment.
To draft a code of corporate governance.
To suggest safeguards to company dealt with insider trading & insider information.
Another meaure to strengthen corporate governance are
stengthen disclosure norms of ipo.
Declaration of quarterly result.
Despatch of one copy of complete balance sheet to all share holders.
Issue of guidelines for preferencial allotment of market price.
Issue of regulations for good framework for takeover and acquisitions. Recommendations : Recommendations Mandatory recommendations
Audit committee omposition
Audit committee role
Non mandatary recommendation
Finance performance committee
Non executive chairperson Applicability : Applicability The recommendations should be applicable to listed companies,their directors,management,Employees and professionals associated with companies.
The recommendations should be applicable to all public and private sector companies.