Unit 4 CG

Unit 4: Legislative Framework of Corporate Governance in India

4.1 Key Regulatory Guidelines

  • Listing Agreement: Outlines responsibilities of companies listed on stock exchanges.

  • SEBI Guidelines: Established standards for corporate governance in India.

  • Companies Act: Governs corporate structure, board composition, and director duties.

4.2 Corporate Governance Across Sectors

  • Public Sector Undertakings (PSUs): Governed by the government; focus on community benefits.

  • Banks: Governed by RBI for transparency and accountability.

  • Insurance Companies: New guidelines from IRDAI for enhanced governance.

  • Service Sector and IT Sector: Sector-specific governance challenges and frameworks.

4.3 Risk Management

  • Importance of risk management in corporate governance.

  • Includes oversight and internal control systems.

4.4 Internal Control Mechanisms

  • Defined roles for risk disclosure and management.

  • Internal controls include preventive, corrective, directive, or detective measures.

4.5 Global Perspective

  • Corporate governance practices vary internationally (Australia, Singapore, South Africa, UK).

  • Global entities promoting governance norms include OECD and ICGN.

4.6 Contemporary Developments

  • Companies must be more accountable to stakeholders.

  • Emphasis on transparency and responsible management.