Tag: Corporate Governance
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An Instance of Accounting Fraud
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Caution in Whistle Blowing
Whistle blowing is one of the key tools used in corporate governance to act as a check on managerial actions. It is also recognised in India as a non-mandatory requirement under Clause 49 of the listing agreement. While whistle blowing is useful in enhancing governance standards, the recent episode at Renault suggests that it is…
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Nomination Committees of Corporate Boards
The recent episode relating to the nomination of directors for appointment on the board of Hewlett-Packard Co. brings to the fore the role of the nomination committee. Institutional Shareholder Services (ISS), a shareholder advisory group, recommended a vote against certain nominees on the ground that HP’s nomination committee was heavily influenced by the HP CEO,…
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Actions Against Independent Directors
On March 11, 2011, SEBI passed an order in relation to Pyramid Saimara Theatre Limited (PSTL) restraining three of its independent directors (Mr. K.S. Kasiraman, Mr. K. Natarahjan and Mr. G. Ramakrishnan) from being independent directors or members of audit committees of any listed company for a period of two years from March 11, 2011.…
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Scams and Corporate Governance
The various scams afflicting India over the last few months were largely perceived as matters within the realm of public governance involving the Government, ministers and officials. Lately, however, the spotlight seems to be shifting to the private sector and to companies that are alleged to be beneficiaries of public mismanagement of resources. Questions are…
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Managerial Remuneration in Unlisted Companies: Process Eased
When the rest of the world is tightening the screws on payment of managerial remuneration in the wake of the financial crisis, the Ministry of Corporate Affairs (MCA) in India has eased the process for such payments in the case of unlisted companies. However, this is certainly understandable. The erstwhile process of requiring even unlisted…
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Corporates and Lobbying
Issues surrounding lobbying by corporates have cornered media attention over the last few weeks. Broadly speaking there does not seem to be any legal provision that directly regulates lobbying, although the Government has announced that it is considering the enactment of a specific legislation that governs lobbying. For an analysis of the legal aspects governing…
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“Professional” Independent Directors
In a recent Economic Times column, Prof. T.T. Ram Mohan discusses the concept of a professional board propagated by Lee Pozen in the Harvard Business Review (Dec. 2010, p. 50). The idea goes as follows: The author, Robert Pozen, lists reasons why boards are ineffective. They are too large (the average size of the top…
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Advisory Boards for Indian Companies
About a week ago the Economic Times’ Corporate Dossier carried two columns (here and here) highlighting the growing popularity of advisory boards in Indian companies. The individuals on such boards perform advisory functions and almost no monitoring functions. In that sense, an advisory board is distinct from the statutorily required board of directors of a…
