Академический Документы
Профессиональный Документы
Культура Документы
Corporate Governance
Governance
Roles
Roles and
and Responsibility
Responsibility
PRESENTED BY-
Rahul Singh
Ravindra Singh
Sajjan Singh
Nitin bansal
sandeep
Ravi Kumar
Rohitass
12/08/21 1
Overview
Overview of
of Corporate
Corporate
Governance
Governance
12/08/21 3
What is corporate governance?
Corporate governance is the system by which
companies are directed and managed.
12/08/21 4
Issues in Corporate
Governance
• Asymmetry of power
• Asymmetry of information
• Interests of shareholders as
residual owners
• Role of owner management
• Theory of separation of powers
• Division of corporate pie among
stakeholders
12/08/21 5
Governance and
Performance measurement -
issues
• Is governance behavior motivated by legislation?
• Do standards vary with jurisdictions or do you adopt the best
option?
• Do you choose the right thing to do irrespective of whether
it’s mandatory or not?
• Is performance evaluation limited to valuation metrics?
• Is it only ROE, Net margin, growth, shareholder wealth
creation?
• Do performance measures need to be holistic?
• We need to encompass all stakeholders
• Governance is an enabler for holistic performance
• How do managers better understand governance requirements?
• Do we need market research for governance requirements?
12/08/21 6
Does performance depend
on governance
• Medium to long term performance requires
governance
• Most companies which have grown in the last 25
years have outstanding performance and have
good governance structure
• A good governance structure treats all
stakeholders fairly
• Governance alone cannot ensure performance
12/08/21 7
Governance and performance
12/08/21 8
Current status on corporate
governance
Comparison of Board structure – Indian top 50 Vs U.S. top 50 – Key Findings
Parameter India (Nifty Fifty companies) US (top 50 out of NYSE 100 index)
Ownership pattern 48% of Indian companies have largest Largest shareholder holds less than
shareholder holding over 50% 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 66% of the top 50 companies have
12 directors more than 12 directors
Board independence 58% of companies have a board majority of All companies have a board majority
independent directors of independent directors
12% have less than 1/3rd of their directors
independent
Executive directors in In 35 companies 50% of the directors – or more Boards of 49 companies out of 50
board – are executive directors have less than 25% executive
directors
Chairman and CEO 60% have separate Chairman and CEO Only 20% have separate Chairman
and CEO
Lead independent director 3 companies have lead independent directors 20 companies have lead independent
directors
Board committees All companies have audit committees – 54% All companies have fully independent
have fully independent Audit Committees audit remuneration and nomination
committees
33 companies have remuneration committees –
of these 14 fully independent and 16 have
majority independent committees
9 companies have nomination committees – 6
12/08/21 are fully independent and 3 have majority 9
independent committees
Source: Crisil Report on Corporate Governance
The Corporate Board
12/08/21 10
Board Role &
Responsibility
• Provide/ Exercise
– Leadership and Strategic Guidance
– Objective Judgment Independent of Management
– Control over the Company
12/08/21 11
Risk management
12/08/21 12
REGULATION &
LEGISLATION
Regulators Government Stock Exchanges
(SEBI/RBI) Legislation Listing Agreements
Lenders
(Banks/ Shareholders/
Listed Corporations Stakeholders
Depositors)
(The Board & the Executive)
12/08/21 13
An Enterprise’s Triple Effect on Society
n t Soc
e
Emissions
n m ial Community
ir o Regeneration
nv Business
E Impact
12/08/21 14
The Triple-Bottom-line
Impact
economics
Business Impact
environment
society
12/08/21 15
Governance Orientation
& Sustainable Profits
A
G
E
N
C SUSTAINABLE
PROFIT LINE
Y
STEWARDSHIP
12/08/21 16
Safety Monitoring
12/08/21 17
Governance Orientation
Matrix
12/08/21 18
Corporate Governance Performance Data
Summary 2005–2008
12/08/21 20