TagCorporate Governance

Extraterritorial Compliance with Corporate Governance Norms

[Shubham Gupta is a 4th law student at Institute of Law, Nirma University, Ahmedabad] The Securities and Exchange Board of India (SEBI) has elucidated its position with the respect to the extra-territorial application of its corporate governance norms. In a recent informal guidance in the matter of KCP Limited, SEBI interpreted regulation 24(1) of the SEBI (Listing Obligations and Disclosure...

Paper on Shareholder Stewardship in India

I have uploaded on SSRN a paper titled “Shareholder Stewardship in India: The Desiderata”, whose abstract is as follows: The goal of this paper is to examine whether the stewardship code, which emanated in circumstances that are specific to the United Kingdom (UK), is capable of transposition to other jurisdictions that experience different corporate structures as well as legal and institutional...

‘Apply and Explain’ – An Alternative Model of Corporate Governance

[Manasvin Andra is a III year student at NALSAR University of Law, Hyderabad] Corporate governance has emerged as one of India Inc.’s primary concerns since the time the Satyam scandal came to light. The incident – dubbed “India’s Enron” – has had a seismic effect on how businesses are regulated, and its effects have been felt most prominently in terms of how corporate governance norms are...

SEBI’s Stewardship Code for Institutional Investors

[Pammy Jaiswal is a Partner at Vinod Kothari and Company] The activism of institutional investors was experienced for the very first time in Life Insurance Corporation v. Escorts Ltd., 1986 AIR 1370. While the Bombay High Court initially held that the role of the Life Insurance Corporation (LIC) is unconstitutional and mala fide, the Supreme Court allowed the LIC’s appeal and specifically stated...

MCA’s Proposals for Overhauling the Audit Industry

In corporate governance parlance, auditors are considered to be key “gatekeepers”. However, governance failures both in India and around the world have pointed fingers towards the role of auditors. This has led to a series of reforms that impose greater stringency on auditors and the audit process. For example, the audit provisions in the Companies Act, 2013 (the “Act”)  have been designed...

SEBI’s Deferral of the Chair-CEO Separation

Following the Kotak Committee recommendations, the Securities and Exchange Board of India (SEBI) in May 2018 announced that the top 500 Indian listed companies must mandatorily separate the roles of the chair and CEO (or managing director) to prevent a concentration of power in a company’s leadership structure. Moreover, SEBI stipulated that the chairperson should not be related to the CEO. These...

Reinforcing the Corporate Governance Framework on Director Competence

[Tushar Oberoy and Rishabh Sharma are 4th year BA.LL.B. (Hons.) students at NALSAR University of Law, Hyderabad] A director of a company has manifold duties and responsibilities that include ensuring that the interests of all shareholders are protected and that healthy management practices are put in place. For effective fulfillment of these responsibilities, a competent director becomes an...

Scope of Appeals against SEBI’s Disposal of Investor Complaints

The Securities and Exchange Board of India (SEBI) has established the “SEBI Complaints Redress System” (SCORES) for receiving investor complaints in respect of listed companies, collective investment schemes and other SEBI-regulated entities. The question of whether an appeal lies from SEBI’s disposal of an investor complaint through SCORES came up for consideration before the Securities...

The Foibles of a Databank and Proficiency Test for Independent Directors

There is no gainsaying that board independence has come to assume a pivotal position in corporate governance. Although it continues to receive constant criticism on account its ineffectiveness, no one musters the courage to banish it or even diminish its importance. While the concept of independent directors only gradually received the required attention and seriousness in India, it has been the...

SEBI Committee on Regulating Proxy Advisors

Over the last decade, India has witnessed considerable shareholder activism in that shareholders, particularly institutions, have become more active in exercising their corporate franchise. Proxy advisory firms have formed an integral part of this movement, as they provide advice to both institutional and individual shareholders on how they may exercise votes at shareholder meetings of companies...

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