2. Corporate Governance “ Satyam Vada Dharmam Chara” - Taittariya Upanishad “ Forever speak the truth and follow the dharma ”
3. Governance Concept in ‘Ramayana’ To provide “the maximum happiness for the maximum number of people for the maximum period, based on the principles of Dharma –righteousness and moral values.” - Ayodhya Kand
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10. International scenario Year Name of Committee/Body Areas/Aspects Covered 1992 Sir Adrian Cadbury Committee, UK Financial Aspects of Corporate Governance 1994 Mervyn E . King’s Committee , South Africa Corporate Governance 1995 Greenbury Committee , UK Directors’ Remuneration 1998 Hampel Committee, UK Combine Code of Best Practices 1999 Blue Ribbon Committee, US Improving the Effectiveness of Corporate Audit Committees 1999 OECD Principles of Corporate Governance 1999 CACG Principles for Corporate Governance in Commonwealth 2002 Sarbanes-Oxley Act Introduced major changes to the regulation of corporate governance and financial practices. 2003 Derek Higgs Committee, UK Review of role of effectiveness of Non-executive Directors 2003 ASX Corporate Governance Council, Australia Principles of Good Corporate Governance and Best Practice Recommendations
11. Indian scenario Year Name of Committee/Body Areas/Aspects Covered 1998 Confederation of Indian Industry (CII) Desirable Corporate Governance – A Code 1999 Kumar Mangalam Birla Committee Corporate Governance 2002 Naresh Chandra Committee Corporate Audit & Governance 2003 N. R. Narayana Murthy Committee Corporate Governance
In Ayodhya Kand of Ramayana, Lord Rama explains the concept of Governance as “ to provide the maximum happiness for the maximum number of people for the maximum period, based as it is on the principles of Dharma –righteousness and moral values.”
Kautilya’s(Chanakya) Arthashastra is the oldest book (around 300 B.C) on Management available to the world This masterpiece covered a wide range of topics and also recommended that the king shall not consult with any advisor who had a vested interest in the outcome of a particular project. establishment of an ethical code of conduct —a topic which has received a great deal of attention now during the past few years after corporate scandals the codification of accounting rules into one uniform system to prevent problems in translating financial data between disparate methods of accounting – a subject which the international accounting community is dealing with in terms of the convergence of accounting standards. In the western world The East India Company introduced a Court of Directors, separating ownership and control (U.K., the Netherlands) in 1600s
The Sarbanes–Oxley Act of 2002 also known as the 'Public Company Accounting Reform and Investor Protection Act' (in the Senate) and 'Corporate and Auditing Accountability and Responsibility Act' and commonly called Sarbanes–Oxley , Sarbox or SOX , is a United States federal law enacted on July 30, 2002 , which set new or enhanced standards for all U.S. public company boards, management and public accounting firms. It is named after sponsors U.S. Senator Paul Sarbanes and U.S. Representative Michael G. Oxley. The act contains 11 titles, or sections, ranging from additional corporate board responsibilities to criminal penalties, and requires the Securities and Exchange Commission (SEC) to implement rulings on requirements to comply with the new law Introduced as a way to restore investor confidence in the wake of corporate accounting scandals like those involving Enron and WorldCom. By creating a Public Company Accounting Oversight Board(PCAOB), strengthening auditor independence, and increasing corporate management’s accountability for the quality of their organizations’ internal controls, SOX seeks to increase the transparency and rigor of all publicly owned companies’ fiscal management. The Sarbanes-Oxley Act is arranged into eleven 'titles'. As far as compliance is concerned, the most important sections within these eleven titles are usually considered to be 302, 401, 404, 409, 802 and 906. SOX was fully implemented in 2004. With a year’s experience under their belts, corporations report that complying with the act, and specifically Section 404, has proven more difficult than they anticipated. Estimates put the cost of compliance for U.S. companies in the range of $5 to $6 billion for 2004.
