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Presented by:

Santosh RajputSweeti NayakMohit RijwaniAmrish Dolas

Deepak Vanjara

Subhdeep Devbaramann

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the process and structure..to direct andmanage the business and affairs of thecorporation with the objective of enhancingshareholder value, which includes ensuringthe financial viability of the business.

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System

Objectives of the company

Good corporate governance structures

Accountability and control systems

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Key objectives

Role of owners in electing the Board

Protection of minorities

Role of other stakeholders in management

Board structure and objectivity of the Board

System of reporting and accountability

Audit and internal control

Effective supervision and enforcement by

regulators To encourage Sustainable Development of

the Company and its stakeholders

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A basic design of existing corporate

governance systems

Corporate

Board ofDirectors

Management

Shareholders Stakeholders Creditors

Supervisory &

enforcementauthorities

Executivedirectors

Ownerdirectors

Independent

Directors

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Separation of ownership and management

Opinion of small shareholders

Large shareholders can effectively voicetheir opinions

The existence of large shareholders can bea built-in corporate governance mechanism

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One way to align the interest ofmanagement and of shareholders is to tiemanagerial compensation to the firmperformance.

Increasing salary with firm performance,and the provision of stock option

compensation

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PROVISIONS OF

SARBANES OXLEY ACT

CEO and CFO to certify appropriateness of financialstatements

Forfeiture of bonuses and profits in certain

circumstances

Prohibition on personal loans to executives

Disclosure of transactions involving management andprincipal stockholders

Annual report

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IMPLICATIONS OF

SARBANES OXLEY ACT

Issuers must comply

Directors and officer must certify annual andperiodic reports (including financial statements)

Employees shielded by whistle-blowerprotections

Attorneys

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Auditors subject to oversight and discipline by a newlycreated independent board

additional restrictions and limitations

Investment banks and research analysts

The Act also created a number of new federal crimes

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NEW YORK STOCK EXCHANGE

REGULATIONS

Majority of Board to comprise of independentdirectors

Non-executive directors to meet at regular intervalswithout the management

Listed companies to compulsorily establish followingcommittees consisting of independent directors only Corporate Governance Committee

Compensation Committee Audit Committee

Listed companies to have an internal audit function

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Listed companies to frame and disclose corporategovernance guidelines Qualification standards Responsibilities Access to management

Compensation Management succession Annual performance evaluation

Listed companies to compulsorily adopt a Code of

Business Conduct and Ethics

CEO to certify annually that no listing agreementviolations

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Current status on corporate

governance

Comparison of Board structure

Indian top 50 Vs U.S. top 50

Key FindingsParameter India (Nifty Fifty companies) US (top 50 out of NYSE 100 index)Ownership pattern 48% of Indian companies have largest shareholder

holding over 50%Largest shareholder holds less than 10%in all cases

Board size Largest board size 17. smallest 5 Largest board size 18. smallest 10

44% of the top 50 companies have more than 12directors

66% of the top 50 companies have morethan 12 directors

Board independence 58% of companies have a board majority ofindependent directors

12% have less than 1/3rd of their directorsindependent

All companies have a board majority ofindependent directors

Executive directors in board In 35 companies 50% of the directors or more areexecutive directors

Boards of 49 companies out of 50 haveless than 25% executive directors

Chairman and CEO 60% have separate Chairman and CEO Only 20% have separate Chairman andCEO

Lead independent director 3 companies have lead independent directors 20 companies have lead independentdirectors

Board committees All companies have audit committees 54% havefully independent Audit Committees

33 companies have remuneration committees ofthese 14 fully independent and 16 have majorityindependent committees

9 companies have nomination committees 6 arefully independent and 3 have majority independentcommittees

All companies have fully independentaudit remuneration and nominationcommittees

Source: Crisil Report on Corporate Governance

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