DEFINETION-

 A BOARD OF DIRECTORS is a recognized group of

people who jointly oversee the activities of

an organization, which can be either for-

profit business, nonprofit organization, or

a government agency
A MEETING OF BOARD COMMITTEE OF RAILWAY
COMPANY IN 1852
 CORPORATE GOVERNANCE

 Governance is a word that barely existed 30

years ago. Now it is in common use not just in
companies but also in charities, universities,
local authorities and National Health Trusts. It
has become shorthand for the way an
organization is run, with particular emphasis on
its accountability, integrity and risk
management
 CORPORATE GOVERNANCE IN INDIA
 Corporate governance in India is a system of
rules, practices, and processes to control a
company. The scope of corporate
governance and objective of corporate
governance in India has been for the first time
inoculated in the theory under the clause 49 of
the Listing Agreement of SEBI but it was later
included as the concept of the corporate
governance provided under the Companies Act,
2013
 NEED OF CORPORATE GOVERNANCE IN INDIA

 Importance and need of corporate governance

were felt after the Scams such as Satyam and
Sahara. It was recognized that good corporate
governance not only improves transparency
and efficiency in a company but also increases
the investor trust in the company. Corporate
governance focuses not only on shareholders
but on all the stakeholders of the company
 SCANDLE

SAHARA SATYAM
OTHERS KNOWN NAMES BOARD COMMITTES
board of directors
and advisors
board of governors

board of managers

board of regents

board of trustees

board of visitors
 BOARD CHARACTERISTICS

Board Leadership – The effectiveness of board meetings depends

largely on the leadership ability of the chairperson to set an
agenda and direct discussions. The board agenda is usually
prepared by chairperson in collaboration with the CEO.

CEO Duality – implies that the company’s CEO holds both the
position of chief executive and the chair of the board of directors.
The are pros and cons of that model, but investors usually prefer
to separate the positions. If they don’t, then it is preferable that
the company’s board consists of a ‘substantial’ majority of
independent directors.

Lead Director – demand for Lead Director increased because of

the presence of CEO duality, resulting from growing concern that
duality places too much power in the hands of CEO, which may
impede board independence.
 BOARD CHARACTERISTICS
Board Composition – in terms of ratio of inside and outside
directors, and the number of directors influence the effectiveness
of the board. A board size of nine to fifteen is considered to be
adequately tailored to the number of board standing committees.

Board Authority – is granted trough shareholder elections. SOX

substantially expanded the authority of directors, particularly
audit committee members, as being directly responsible for hiring,
firing, compensating, and overseeing the work of the companies’
independent auditors.

Responsibilities – the primary responsibility of the board of

directors that the companies assets are safeguarded and that
managerial decisions and actions are made in a manner of
maximizing shareholders wealth while protecting the interests of
other shareholders
 BOARD CHARACTERISTICS
Resources – board of directors should have adequate resources to
effectively fulfill its oversight functions. Resources available to the
board consist of legal, financial, and information resources.

Board Independence – implies that, to be independent director

shouldn’t have any relationship with the company other than his or
her directorship that my compromise the director’s objectivity and
loyalty to the companies shareholders.

Director compensation – best practices suggest that increases in

stock ownership, reduction in cash payments, and charges in
compensation should be aligned with shareholders long-term
interest determined by board, approved by shareholders, and fully
disclosed in public reporting.
 The following are some of the
important committees of the Board-
 AUDIT COMMITTEE
the Audit Committee shall assist the Board of Directors in the
oversight of
(1) The integrity of the financial statements of the Company,
(2) The effectiveness of the internal control over financial
reporting,
(3) The independent registered public accounting firm’s
qualifications and independence,
(4) The performance of the Company’s internal audit function
and independent registered public accounting firms,
(5) The Company’s compliance with legal and regulatory
requirements,
(6) The performance of the Company’s compliance function.
*The Committee shall be appointed by the Board and
consist of at least three Directors, each of whom are
independent of management and the Company as
defined by the Bylaws of the Company, the SEC and the
New York Stock Exchange as well as Clause 49 of the
Listing Agreement. Two thirds of the members shall be
independent directors.

*All Committee members shall be financially literate, or

shall become financially literate within a reasonable
period of time after appointment to the Committee. The
Committee shall aspire to have at least one member
who is an “audit committee financial expert” as such
term is defined by the SEC.
Meeting of Audit Committee:
The audit committee shall meet at least thrice a year. One
meeting shall be held before finalization of annual accounts and
one every six months. The quorum shall be either two members or
one third of the members of the audit committee, whichever is
higher and minimum of two independent directors

Powers of Audit Committee:

The audit committee shall have powers which should include the
following:
To investigate any activity within its terms of reference.
To seek information from any employee.
To obtain outside legal or other professional advice.
To secure attendance of outsiders with relevant expertise, if it
considers necessary.
 GOVERNANCE COMMITTEE
Together with the audit and compensation committees, the
nominating/corporate governance committee rounds out the
three standing committees of a public company’s board of
directors. It plays a critical role in overseeing matters of corporate
governance for the board, including formulating and
recommending governance principles and policies. As its name
implies, this committee is charged with enhancing the quality of
nominees to the board and ensuring the integrity of the
nominating process.
- consist of both executives and nonexecutives directors; should
be established to advise, review, and approve management
strategic plans, decisions, and actions in effectively managing the
company.
 SHARE HOLDER GRIEVANCE
COMMITTEE

According to Clause 49-IV(G)(iii) of the Listing Agreement, a

board committee under the chairmanship of a non-executive
director shall be formed to specifically look into the redressal of
shareholder and investors complaints like transfer of shares,
non receipt of balance sheet, non receipt of declared dividends
etc. This committee shall be designated as “Shareholders/
Investors Grievance Committee.
Powers of Share Holder Greviance Committee :
•
To allot the Equity Shares of the Company and to ensure

• Efficient transfer of shares; including review of cases for refusal of transfer

transmission of shares and debentures;

• Redressal of shareholder and investor complaints like transfer of shares, non-

receipt of balance sheet, non-receipt of declared dividends etc;

• Issue of duplicate / split / consolidated share certificates;

• Allotment and listing of shares;

• Review of cases for refusal of transfer / transmission of shares and debentures;

 RISK COMMITTEE
The committee comprises a minimum of three independent non-
executive directors, as well as the chief executive and financial
director. The chair of the board may not serve as chair of this
committee. Members of the committee are individuals with risk
management skills and experience.

The committee’s responsibilities include:

• Review and approve for recommendation to the board a risk management policy and
plan developed by management. The risk policy and plan are reviewed annually.

• Monitor implementation of the risk policy and plan, ensuring an appropriate enterprise-
wide risk management system is in place with adequate and effective processes that
include strategy, ethics, operations, reporting, compliance, IT and sustainability.
• Monitor that risks are reviewed by management, and that management’s
responses to identified risks are within board-approved levels of risk tolerance.

• Ensure risk management assessments are performed regularly by management.

• Issue a formal opinion to the board on the effectiveness of the system and
process of risk management.

• Review reporting on risk management that is to be included in the integrated

annual report.

• Review annually the charters of the group’s significant subsidiary companies’ risk
committees, and their annual assessment of compliance with these charters to
establish if the committee can rely on the work of these risk committees.

• Perform an annual self-assessment of the effectiveness of the committee,

reporting these indings to the board
THANK YOU