Presentation on..

Securities and Exchange Board of India.(SEBI)

ESTABLISHMENT OF SEBI
The Securities and Exchange Board of India was established on April 12, 1992 in accordance with the provisions of the Securities and Exchange Board of India Act, 1992.

HISTORY:
The Securities and Exchange Board of India was established by the government of India on 12 April 1988 as an interim administrative body to promote orderly and healthy growth of the securities market and for investor protection.

It was to function under the overall administrative control of the Ministry of Finance of the GOI.

Factors Determining Corporate Governance

Ownership
a. Equity holders b. Directors and their relatives c. Corporat bodies d. Term lending institutions e. Institutional Investors etc.

Composition of Directors Performance of Board of Directors Financial Soundness Influence of Business Environment

Features of Corporate Governance

Social Consciousness Value of Ethics

Universal Application
Systematic Approach Direction of Supervision

Needs and Significance of CG

Here are some reasons why corporate governance has become the backbone of accountability in the corporate world

Changing Ownership Structure Social Responsibility Growth in the Number of SCAMS in the Corporate Sector Corporate Oligarchy Indifference on the Part of Shareholders Multiplicity of Takeovers and Mergers Trends towards Globalization

Basis / Mechanism of CG
The Companies Act, 1956 Securities and Exchange Board of India (SEBI) The Capital Market Nominee Directors Statutory Audit Code of Conduct

Principles of Corporate Governance

Rights and equitable treatment of shareholders Interests of other stakeholders

Role and responsibilities of the board

Integrity and ethical behavior Disclosure and transparency

Clause 49 of the Listing Agreement

A brief statement on companys philosophy on code of governance. Board of Directors Audit Committee Remuneration Committee Shareholders Committee General Body Meetings Disclosure Means of Communication General Shareholder Information

Recent Changes in Clause 49

Independent Director Code of Conduct for Board and Senior Management CEO/CFO Certification Subsidiary Companies Board Disclosure Risk Management Responsibility of Board Members

Internal Corporate Governance Controls

Internal corporate governance controls monitor activities and then take corrective action to accomplish organisational goals. Examples include:

Monitoring by the board of directors Internal control procedures and internal auditors Balance of power Remuneration

External Corporate Governance Controls

External corporate governance controls encompass the controls external stakeholders exercise over the organisation. Examples include:

Competition Debt covenants Demand for and assessment of performance information (especially financial statements) Government regulations Managerial Labour market Media pressure Takeovers

Different Countries, Different Models

This has led to different systems in different countries, depending on which constituent or interested party in the companys operations has been given the most importance. In the Anglo-Saxon world, for example, there has always been a single board of directors consisting of executive and non-executive, or independent directors. Elsewhere, a two tier structure exists to balance the executive board with representatives from other stakeholder groups like employees and bankers.

Why was it in the news recently?

Corporate governance has most recently been debated after the corporate fraud by Satyam founder and chairman Ramalinga Raju. In fact, trouble started brewing at Satyam around December 16 when Satyam announced its decision to buy stakes in Maytas Properties and Infrastructure for $1.3 billion. The deal was soon called off owing to major discontentment on the part of shareholders and plummeting shareprice. Satyam had received the Golden Peacock Global Award for Excellence in Corporate Governance in September 2008 but was stripped of it soon after Raju's confession.

Why do we have to take corporate governance seriously?

The issue of integrity The bonus culture The regulatory framework The importance of corporate governance in Directors' training Business Ethics Responsibility.

Corporate Governance in India

In India CG has been in use for a very long time but it is only recently that it has gathered new prominence. There are the reasons cited for serious concern towards CG.

The 1991 Economic Reforms Accountability Protection of Interest

Corporate Governance in Banking

The Corporate Governance in Banking organizations has been received considerable attention during the recent years. CG in the Banking organization has been examined by OECD, the bases committee and in India by an Advisory Group on CG appointed by RBI. Thus the Financial Management function has a big role to play in institutionalizing good Corporate Governance.

Conclusion
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