Description
This ppt contains: Good corporate governance; Objectives of Good Corporate Governance; Good corporate governance Initiatives in India by SBI; Good corporate governance Initiatives in India by L&T; Good corporate governance Initiatives in India by Ashok leyland; Good corporate governance Initiatives in India by wipro; Good corporate governance Initiatives in India by Tata.
Good and Bad Corporate Governance practices in India
Agenda
• Defining Good Corporate Governance • Objectives • Key factors • Initiatives in India • Few Examples in Indian Context • KPMG Research Findings • Conclusion
What is good corporate governance?
It is characterized by a firm commitment and adoption of ethical practices by an organization across its entire value chain and in all of its dealings with a wide group of stakeholders encompassing employees, customers, vendors, regulators and shareholders in both good and bad times
Objectives of Good Corporate Governance
• Enhance performance of corporations
• Create environment to motivate managers to maximize return on investment
• Good corporate governance increases public confidence in a corporation, and lowers the cost of capital for investment • Conformance of corporations with interest of investors and society • Creating fairness, transparency and accountability in business activities among management, employees and the board
Good Corporate Governance emphasizes on• Better board preparedness and balance of power
• Increased accountability to shareholders
• Creating a mindset that decency and honesty pays
• Business leaders must walk the talk
• The world should adopt a uniform global accounting standard • Bring moderation to CEO salaries, bonuses and perks • Institute global awards for good corporate behavior
Good corporate governance Practices in India
A distant dream or a near reality???
Let’s get a brief overview of the scenario…
Good Corporate Governance Initiatives in India
• CII came up with first Voluntary code of conduct in 1998 • SEBI – incorporation of Clause 49 • SCOPE Awards for Excellence and Outstanding Contribution to the Public Sector Management launched in 1996-97 • In 2002, a SCOPE Centre for Excellence in Corporate Governance was established • Aim to promote and inculcate good corporate governance practices among public enterprises as a means of enhancing their competitiveness
State Bank Of India
• Governed by act of Parliament(SBI Act 1955) • President of India is the Largest Shareholder (59.41%) • Non residents(FII,NRI,GDR) (12.33%) • Institutions (10.90%) • Resident Individuals(6.7%) Board of Directors 3 Executive Directors and 7 non Executive Directors • Chairman, 2 MD (Executive Directors) • 4 directors- elected by Shareholders • 3 directors- nominated by GOI Non EDs include Academicians, Journalists, Business Professionals
Committees
• • • • • • • • • 9 Committees Executive Committee Audit Committee Shareholders’/Investors Grievance Committee, Risk Management Committee Special Committee for Monitoring of Large Value Frauds (Rs.1crore and above) Customer Service Committee Technology Committee Committee on Rural Sector Business Remuneration Committee of the Board
• The Company's philosophy on Corporate Governance is built on a rich legacy of fair and transparent governance and disclosure practices • Larsen & Toubro (L&T) has been judged as India`s Best Managed Company by leading business magazine `Business Today` and its knowledge partner `Ernst & Young` (2008)
The Governance structure
The Company has four tiers of Corporate Governance structure 1. Strategic Supervision 2. Executive Management 3. Strategy & Operational Management 4. Operational Management The four-tier governance structure besides ensuring greater management accountability and credibility, facilitates increased autonomy of businesses, performance discipline and development of business leaders, leading to increased public confidence
• The board of directors –5 promoter group, 1 associate & 4 independent directors • The promoters hold about 51% stake and 3 independent directors holding 14% stake • Apart from the board there are 3 committees
• Audit • Remuneration • Share holder grievance
• Appointment of an Ombudsman to deal with other important dealings • It has unique code of conduct which binds all its employees • It has implemented ERP MAX+ a JV with Avia motors which focuses on transparency in manufacturing
• Wipro has been named amongst The Five Best Companies in Corporate Governance Practices in Asia/Pacific in 2007 by MZ Consult • As on March 31, 2009,the Board comprised of 6 Independent Directors out of a total strength of 10 directors
Corporate Governance philosophy is put into practice in Wipro through the following four layers, namely 1. Governance by Shareholders 2. Governance by Board of Directors 3. Governance by Sub-committee of Board of Directors 4. Governance of the management process
• Highlight of Wipro’s CG – TRANSPARENCY The following are very clearly shared on the web:
• Charters of the Committees • Wipro's ombudsprocess for Non employees and Employees • Corporate governance guidelines • Code of ethics for principal & finance officers • Code of business conduct and ethics • NYSE Corporate Governance Report 2009
Whistle blower policy incorporated by audit committee. Provides formal mechanism for all employees of the Company to approach the Ethics Counsellor/Chairman of the Audit Committee of the Company and make protective disclosures about the unethical behaviour, actual or suspected fraud or violation of the Company’s Code of Conduct
The State of Corporate Governance in India- A poll KPMG Audit Committee Institute
Period- November 2008 to January 2009
Sectors covered• Private equity firms • Financial services • Manufacturing
• Number of respondents- 90
• Business Profile of respondents
Findings
Where does India stand in the Asian context? BUT Can we credit Clause 49 for this achievement? Lets see what the Corporates say….
Factors were ranked in the order of importance
Conclusion
• Steps are being taken by the government and corporations to improve governance standards
• Corporates still need to address some important issues ? Interest of minority stakeholders are still overlooked ? Role of Independent Directors • Good Corporate is still a far cry for many organizations
Thank you
doc_998827071.pptx
This ppt contains: Good corporate governance; Objectives of Good Corporate Governance; Good corporate governance Initiatives in India by SBI; Good corporate governance Initiatives in India by L&T; Good corporate governance Initiatives in India by Ashok leyland; Good corporate governance Initiatives in India by wipro; Good corporate governance Initiatives in India by Tata.
Good and Bad Corporate Governance practices in India
Agenda
• Defining Good Corporate Governance • Objectives • Key factors • Initiatives in India • Few Examples in Indian Context • KPMG Research Findings • Conclusion
What is good corporate governance?
It is characterized by a firm commitment and adoption of ethical practices by an organization across its entire value chain and in all of its dealings with a wide group of stakeholders encompassing employees, customers, vendors, regulators and shareholders in both good and bad times
Objectives of Good Corporate Governance
• Enhance performance of corporations
• Create environment to motivate managers to maximize return on investment
• Good corporate governance increases public confidence in a corporation, and lowers the cost of capital for investment • Conformance of corporations with interest of investors and society • Creating fairness, transparency and accountability in business activities among management, employees and the board
Good Corporate Governance emphasizes on• Better board preparedness and balance of power
• Increased accountability to shareholders
• Creating a mindset that decency and honesty pays
• Business leaders must walk the talk
• The world should adopt a uniform global accounting standard • Bring moderation to CEO salaries, bonuses and perks • Institute global awards for good corporate behavior
Good corporate governance Practices in India
A distant dream or a near reality???
Let’s get a brief overview of the scenario…
Good Corporate Governance Initiatives in India
• CII came up with first Voluntary code of conduct in 1998 • SEBI – incorporation of Clause 49 • SCOPE Awards for Excellence and Outstanding Contribution to the Public Sector Management launched in 1996-97 • In 2002, a SCOPE Centre for Excellence in Corporate Governance was established • Aim to promote and inculcate good corporate governance practices among public enterprises as a means of enhancing their competitiveness
State Bank Of India
• Governed by act of Parliament(SBI Act 1955) • President of India is the Largest Shareholder (59.41%) • Non residents(FII,NRI,GDR) (12.33%) • Institutions (10.90%) • Resident Individuals(6.7%) Board of Directors 3 Executive Directors and 7 non Executive Directors • Chairman, 2 MD (Executive Directors) • 4 directors- elected by Shareholders • 3 directors- nominated by GOI Non EDs include Academicians, Journalists, Business Professionals
Committees
• • • • • • • • • 9 Committees Executive Committee Audit Committee Shareholders’/Investors Grievance Committee, Risk Management Committee Special Committee for Monitoring of Large Value Frauds (Rs.1crore and above) Customer Service Committee Technology Committee Committee on Rural Sector Business Remuneration Committee of the Board
• The Company's philosophy on Corporate Governance is built on a rich legacy of fair and transparent governance and disclosure practices • Larsen & Toubro (L&T) has been judged as India`s Best Managed Company by leading business magazine `Business Today` and its knowledge partner `Ernst & Young` (2008)
The Governance structure
The Company has four tiers of Corporate Governance structure 1. Strategic Supervision 2. Executive Management 3. Strategy & Operational Management 4. Operational Management The four-tier governance structure besides ensuring greater management accountability and credibility, facilitates increased autonomy of businesses, performance discipline and development of business leaders, leading to increased public confidence
• The board of directors –5 promoter group, 1 associate & 4 independent directors • The promoters hold about 51% stake and 3 independent directors holding 14% stake • Apart from the board there are 3 committees
• Audit • Remuneration • Share holder grievance
• Appointment of an Ombudsman to deal with other important dealings • It has unique code of conduct which binds all its employees • It has implemented ERP MAX+ a JV with Avia motors which focuses on transparency in manufacturing
• Wipro has been named amongst The Five Best Companies in Corporate Governance Practices in Asia/Pacific in 2007 by MZ Consult • As on March 31, 2009,the Board comprised of 6 Independent Directors out of a total strength of 10 directors
Corporate Governance philosophy is put into practice in Wipro through the following four layers, namely 1. Governance by Shareholders 2. Governance by Board of Directors 3. Governance by Sub-committee of Board of Directors 4. Governance of the management process
• Highlight of Wipro’s CG – TRANSPARENCY The following are very clearly shared on the web:
• Charters of the Committees • Wipro's ombudsprocess for Non employees and Employees • Corporate governance guidelines • Code of ethics for principal & finance officers • Code of business conduct and ethics • NYSE Corporate Governance Report 2009
Whistle blower policy incorporated by audit committee. Provides formal mechanism for all employees of the Company to approach the Ethics Counsellor/Chairman of the Audit Committee of the Company and make protective disclosures about the unethical behaviour, actual or suspected fraud or violation of the Company’s Code of Conduct
The State of Corporate Governance in India- A poll KPMG Audit Committee Institute
Period- November 2008 to January 2009
Sectors covered• Private equity firms • Financial services • Manufacturing
• Number of respondents- 90
• Business Profile of respondents
Findings
Where does India stand in the Asian context? BUT Can we credit Clause 49 for this achievement? Lets see what the Corporates say….
Factors were ranked in the order of importance
Conclusion
• Steps are being taken by the government and corporations to improve governance standards
• Corporates still need to address some important issues ? Interest of minority stakeholders are still overlooked ? Role of Independent Directors • Good Corporate is still a far cry for many organizations
Thank you
doc_998827071.pptx