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1.  Submitted to Prepare by.
 Anupama Goswami Gediya Rakesh
Gumasana Bakul
Kabariya Nirav
K.K Parekh institute of management studies-Amreli

2. Corporate Governance is concerned with holding
the balance between economic and social goals
and between individual and communal goals.
The corporate governance framework is there to
encourage the efficient use of resources and
equally to require accountability for the
stewardship of those resources.
 The aim is to align as nearly as possible the
interests of individuals, corporations and society
- Sir Adrian Cadbury

3. ◦ In December 1995, CII set up a task force to design a voluntary code of
corporate governance
◦ The final draft of this code was widely circulated in 1997
◦ In April 1998, the code was released. It was called Desirable Corporate
Governance: A Code
◦ Between 1998 and 2000, over 25 leading companies voluntarily followed
the code: Bajaj Auto, Hindalco, Infosys, Dr. Reddy’s Laboratories,
Nicholas Piramal, Bharat Forge, BSES, HDFC, ICICI and many others

4.  Following CII and SEBI, the Department of Company Affairs
(DCA) modified the Companies Act, 1956 to incorporate
specific corporate governance provisions regarding
independent directors and audit committees
 In 2001-02, certain accounting standards were modified to
further improve financial disclosures. These were:
◦ Disclosure of related party transactions
◦ Disclosure of segment income: revenues, profits and capital
employed
◦ Deferred tax liabilities or assets
◦ Consolidation of accounts
 Initiatives are being taken to (i) account for ESOPs, (ii) further
increase disclosures, and (iii) put in place systems that can
further strengthen auditors’ independence

5.  To conflict of interest particular those b/w manager
and shareholders.
 To assets of the company are used efficiently and
in the best interest of its investors and other
shareholder.
 To create a trust in the corporate and in its
abilities.

6.  To exercise effective control on corporate affairs
by the board at all times.
 To promote business development.
 To improve the efficiency of the capital markets.
 To enhance the effectiveness in the service of the
real economy.
 To promote a healthy environment for the long
term investment.

7.  Corporate Governance Committee:
 Every publicly owned corporation should have a
committee that addresses corporate governance
issues.
 A corporate governance committee
performs the core function of
recommending nominees to the board. The
committee also recommends directors for
appointment to committees of the board.

8.  Quality of Corporate Governance and Firm
Performance:
 corporate governance creates a framework of goals
and policies to guide an organization’s progress and
forms a foundation for assessing board and
management performance.
 There is strong evidence to suggest that corporate
performance and to an extent economic stability, is
directly impacted by the quality of corporate
governance.

9.  Good Board practices
 Control Environment
 Protect to Shareholder interest
 Transparency and disclose

10.  Integrity and ethical behaviour Promote the
trust of investors
 Rights and equitable treatment of
shareholders.
 Integrity and ethical behaviour

11.  Internal control procedures and internal
auditors.
 Balance of power.
 External corporate governance controls.

12.  Corporate Governance and its impact on the
performance of a firm, the better corporate
governance leads to better corporate
performance.
 Good governance means little expropriation of
corporate resources by managers or controlling
shareholders, which contributes to better
allocation of resources and better performance.

13.  Corporate governance purposeful and strategic
direction and to manage the company.
 Corporate governance ensures compliance with the
memorandum and Articles of Association of the
company.
 To act at all times, in the best interests of the
company, including shareholders, employees and
other stakeholders.

14.  The need for corporate governance arises because of
the separation of management and ownership in the
modern corporation. In practice, the interest of those
who have effective control over a firm can differ from
the interests of those who supply the firm with external
finance.
 Effective corporate governance requires a clear
understanding of the respective roles of the
board and of senior management and their
relationships with others in the corporate
structure.