MAJOR THRUST AREAS OF CORPORATE GOVERNANCE AND GOOD CORPORATE GOVERNANCE

MAJOR THRUST AREAS OF CORPORATE

GOVERNANCE AND GOOD CORPORATE GOVERNANCE

CORPORATE GOVERNANCE
Background Corporate governance is "the system by which companies are directed and controlled".

Corporate Governance may be defined as holding a balance between economic & social goals & between individual & commercial goals

PARTIES INVOLVED
Three key constituents: oBoard Of Directors oShareholders oManagement Government agencies, stock exchanges, lenders, suppliers, customers etc.

BENEFITS
Major benefits of corporate governance to: Companies

Shareholders
Economy

Principles of Corporate Governance

Rights & equitable treatment of shareholders.
Interests of other shareholders.

Roles & responsibilities of the board.

Integrity & ethical behavior.

Disclosure & Transparency.

Four Pillars of Corporate Governance

Accountability
Fairness Transparency

Independence

ETHICAL CONDUCTS OF COMPANIES

Codes of most companies are approved by their boards, and should be clearly reflective of the "tone at the top".

General Electrics
TATA Infosys

MAJOR THRUST AREAS

Effective institutional and legal framework
Protects and facilitates the exercise of shareholders rights Equitable treatment of all shareholders. Importance of the role of stakeholders Importance of timely, accurate and transparent disclosure Mechanism. Deal with the board structures & responsibilities.

INTRODUCTION TO SATYAM COMPUTER CONSULTANCY LIMITED

SATYAM COMPUTER CONSULTANCY LIMITED was established on June 24 1987. The founder of such organization was mr.Ramalinga Raju.

DETAILS ABOUT THE CASESATYAM SCAM

In mid-December2008, Satyam announced acquisition of two companies - Maytas Properties andMaytas Infrastructure owned by the family members of Satyam's founder andChairman Ramalinga Raju (Raju). It planned to acquire 100% and 50% stakes in Maytas property Questions were raised on the corporate governance practices of Satyam with analysts and investors questioning the company's board on the reasons for giving consent for the acquisition as it was a related party transaction.

The case examines the corporate governance issues at the India based I services company, Satyam Computer Services Limited (Satyam).

AFTER EFFECTS OF THE SCAM

After the scam of rs.14000 crore came into light, the board of members were Replaced temporarily by experts Even the auditing company, named KPMG was penalized. The final three bidders for satyam were L&T, Spice group and tech mahindra.

GOVERNANCE ISSUE

Governance issue at Satyam arose because of non fulfillment of obligation of the company towards the various stakeholders. It proved a poor relationship with all the stakeholders.
It is well known that a shareholder has a right to get information from the organization, such information could be with respect to the merger and acquisition. Shareholders expect transparent dealing in an organization.

ACTUAL SCENARIO
Simple manipulation of revenues and earnings To show superior performance

Raising fictitious bills for services that were never rendered. To increase the Cash & bank balance correspondingly.

FUTURE PROSPECTS
The global environment changing continuously, there is a greater need of adopting and sustaining good corporate governance practices for value creation and building corporations of the future.
Industrialists and corporates in the country are being increasingly asked to adopt better and transparent corporate practices. The application of corporate governance requirements can adversely affect the relationship amongst participants of the governance system.

SUGGESTIONS
There is a greater need to increase awareness among entrepreneurs about the various aspects of corporate governance. There are some of the areas that need special attention, namely:-

Quality of audit, which is at the root of effective corporate governance Role of Board of Directors as well as accountability of the CEOs and CFOs Quality and effectiveness of the legal, administrative and regulatory framework; etc.

THANK YOU!!!
PRESENTED BY: SHIVANGI BARANWAL(10) DRASHTI BHATT(14) DRASTI DOSHI(23) SHRUTI KURUP(52)