A Seminar on 'Corporate Governance: Actual Practices and Challenges Ahead'
Date: 30th January 2010
Speaker – Dr.Harish Handa
Senior Reader, Delhi University.
Venue: IMA Convention Centre, Indraprastha Marg (Near ITO Building)
Time: 6:00 p.m
An evening seminar is being organized on the topic ‘Corporate Governance: Actual Practices and Challenges Ahead’. The speaker is Dr.Harish Handa, Senior Reader, Delhi University.
While recent high-profile corporate governance failures in developed countries have brought the subject to media attention, the issue has always been central to finance and economics. The issue is particularly important for developing countries since it is central to financial and economic development. Recent research has established that financial development is largely dependent on investor protection in a country – de jure and de facto.
While different committees on Corporate Governance have explicitly mentioned the role, independence, remuneration and responsibilities of independent directors, the same has not been translated into becoming an adequate check on managerial excesses. The paper attempts to examine the causes for these failed practices and what corrective actions can prevent the repetition of these types of episodes. Some suggestive reforms include revamping the Corporate Governance Code (Clause 49 and others), ensuring that the codes are implemented in letter and spirit and undertaking a systematic review of company’s quarterly performance on all fronts and across all stakeholders. Apart from that Independent Directors to be made more responsible by entrusting them with powers to take charge of the judicial role. Developing more and more company-specific governance models of corporate governance in lieu of the current straightjacket and standard type applicable to all listed companies. Clause 49 would then become a guideline, not mandatory. Risk Management must be assessed and strengthened in all companies of a given asset-size or other magnitude. This is required to provide them with a hedge against uncertain situations.
Lastly audit and assurance quality needs to be disciplined and improved. The Voluntary Guidelines on Corporate Governance, 2009, issued by the ministry of corporate affairs (MCA), are an important step for achieving good corporate governance. If followed in spirit, it will generate long-term faith in all investors and stakeholders of companies. It has covered themes like the board of directors, the responsibilities of the board, the audit committee of board, the auditors and the secretarial audit and institution of mechanism for whistle blowing.
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