The regulator Securities and Exchange Board of India, on September 2015, had asked listed companies towards submitting compliance report on corporate governance in a set format with disclosures relating to the composition of the board of directors and the committees as well as their respective meetings, amongst others.
Markets regulator Securities and Exchange Board of India (SEBI) on July 16 came out with the latest format for compliance report on corporate governance towards being submitted through listed companies to stock exchanges. In a notification circulated, the SEBI prescribed the latest and new format for disclosures is that required to be made on a quarterly basis, the annual basis for the whole of the financial year as well as within 6 months from the end of the financial year that could be submitted along with the second-quarter report.
SEBI had stated that considering the revised timelines under the amended regulations, the circular would come into force with impact from the quarter ended September 30, 2019.
In September 2015, SEBI had asked listed corporations towards submitting compliance record on corporate governance in a set format with disclosures relating to the composition of the board of directors along with the committees as well as their respective meetings, amid others.
Though, necessary amendments have been made in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 which is to implement the recommendations of the committee on corporate governance.
Securities and Exchange Board of India also stated that in that way some of these amendments demand changes towards the formatting of the quarterly compliance report.
According to the new format for the quarterly report being submitted within 15 days from close of each quarter, information’s associated to the number of independent directorships as well as chairperson of the corporation shall have to be disclosed along with the disclosures regarding other members of the board of directors.
Moreover, the date of appointment as well as the cessation of various committees, particulars of the number of independent directors and directors present at the meeting of the board of directors and meeting of committees are required to be given.
In the report which is required to be submitted at the end of 6 months after the end of the financial year, the status of presence of the chairperson of the stakeholder relationship committee at the annual general meeting requires to be stated beside the existing disclosure requirements. The annual compliance report on corporate governance is correlated towards disclosure in terms of listing regulations.
Corporate Governance in India
Corporate governance is a procedure established for companies based on certain structures and principles through which a corporation is governed. It guarantees that the corporate works in a way it is supposed to work for achieving the preferred goals. It makes the firms accountable towards each stakeholder that includes directors, shareholders, employees, consumers, etc.
Generally, Corporate governance generally refers to practices by which a firm is controlled, directed and administered. The main concern of Corporate Governance is to make certain the conditions whereby a corporation’s directors and managers do something on behalf of the interest of the corporation and its stakeholders. It delivers the means by which managers are held responsible for capital providers for the use of corporate assets.
Importance of Corporate Governance
Corporate governance has a significant role in every corporation. The importance of Corporate Governance in a corporation is-
There is a level of confidence among the corporation and its stakeholders, due to the good corporate governance.
For good corporate governance, the corporation should have an active group of independent directors on the board. It makes certain confidence in the market.
Foreign institutional stakeholders consider corporate governance before investing in any of the corporations. It is one of the most significant criteria in foreign investors list.
Good corporate governance sets a positive influence on the share price of the corporation.
If the corporation is maintaining a clean record and has a positive image on the corporate governance front, then it is much simpler for the corporations to source capital at a more reasonable cost.
Corporations having good corporate governance are far away from scams and any bad exposures.
Corporate Governance Framework in India
The regulatory Frameworks on Corporate Governance are for Indian corporations are
The Companies Act of 2013.
Securities and Exchange Board of India (SEBI) Guideline.
Standard Listing Agreement of Stock Exchanges.
Accounting Standards by the Institute of Chartered Accountants of India (ICAI).
Companies (Indian Accounting Standards) Rules of 2015.
Companies (Indian Accounting Standards) (Amendment) Rules of 2016 and Companies (Accounting Standards) (Amendment) Rules of 2016.
Companies (Indian Accounting Standards) Rules of 2018.
Secretarial Standards.
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