CORPORATE

GOVERNANCE

Corporate Governance
Corporate Governance is the application of

best management practices, compliance of law

in true letter and spirit and adherence to
ethical standards for effective management
and distribution of wealth and discharge of
social
responsibility
for
sustainable
development of all stakeholders.
Conduct of business in accordance with
shareholders desires (maximising wealth) while
confirming to the basic rules of the society
embodied in the Law and Local Customs

Corporate Governance
Relationships among various participants

in determining the direction and

performance of a corporation.
Effective management of relationships
among
Shareholders
Managers
Board of directors
employees
Customers
Creditors
Suppliers
community

Why Corporate
Governance?
Better access to external finance
Improved company performance

sustainability
Higher firm valuation and share
performance
Reduced risk of corporate crisis and
scandals

Principles of Corporate
Governance
Sustainable development of all stake

holders- to ensure growth of all individuals

associated with or effected by the
enterprise on sustainable basis
Effective management and distribution
of wealth to ensue that enterprise
creates maximum wealth and judiciously
uses the wealth so created for providing
maximum benefits to all stake holders and
enhancing its wealth creation capabilities to
maintain sustainability

 Discharge of social responsibility- to

ensure that enterprise is acceptable to the

society in which it is functioning
Application of best management
practices- to ensure excellence in functioning
of enterprise and optimum creation of wealth
on sustainable basis
Compliance of law in letter & spirit- to
ensure value enhancement for all stakeholders
guaranteed by the law for maintaining socioeconomic balance
Adherence to ethical standards- to ensure
integrity, transparency, independence and
accountability in dealings with all stakeholders

Four Pillars of Corporate

Governance
Independence
Transparency
Fairness
Accountability

Accountability
Ensure that management is accountable to

the Board
Ensure that the Board is accountable to

shareholders

Fairness
Protect Shareholders rights
Treat all shareholders including

minorities, equitably
Provide effective redress for violations

Transparency
Ensure timely, accurate disclosure on all
material matters, including the financial
situation, performance, ownership and
corporate governance

Independence
Procedures and structures are in place

so as to minimise, or avoid completely

conflicts of interest
Independent Directors and Advisers i.e.

free from the influence of others

Elements of Corporate
Governance
Good Board
Control
Transparent
Well-defined
Board
commitment
Environment
practices
disclosure
shareholder rights

Good Board Practices

Clearly defined roles and authorities
Duties and responsibilities of Directors

understood
Board is well structured
Appropriate composition and mix of

skills

Good Board procedures

Appropriate Board procedures
Director Remuneration in line with best

practice
Board self-evaluation and training

conducted

Control Environment
Business continuity procedures in place
Independent external auditor conducts

audits
Independent audit committee

established
Internal Audit Function
Management Information systems

Transparent Disclosure
Companies Registry filings up to date
High-Quality annual report published
Web-based disclosure
Financial Information disclosed
Non-Financial Information disclosed
Financials prepared according to International

Financial Reporting Standards (IFRS)

Well-Defined Shareholder
Rights
Well-organised shareholder meetings

conducted
Clearly defined and explicit dividend

policy

Board Commitment
The Board discusses corporate

governance issues and has created a

corporate governance committee
The company has a corporate
governance champion
A corporate governance improvement
plan has been created
Appropriate resources are committed to
corporate governance initiatives

Board Commitment
Policies and procedures have been

formalised and distributed to relevant

staff
A corporate governance code has been
developed
A code of ethics has been developed
The company is recognised as a
corporate governance leader

Other Entities
Corporate Governance applies to all

types of organisations not just

companies in the private sector but also
in the not for profit and public sectors
Examples are NGOs, schools, hospitals,

pension funds, state-owned enterprises

Corporate governance of India has

undergone a paradigm shift
In 1996, Confederation of Indian Industry (CII), took

a special initiative on Corporate Governance.

The objective was to develop and promote a code

for corporate governance to be adopted and

followed by Indian companies, be these in the
Private Sector, the Public Sector, Banks or Financial
Institutions, all of which are corporate entities.
This initiative by CII flowed from public concerns

regarding the protection of investor interest,

especially the small investor, the promotion of
transparency within business and industry

Conclusion
As Indian companies compete globally for access to

capital markets, many are finding that the ability to

benchmark against world-class organizations is
essential.
For a long time, India was a managed, protected

economy with the corporate sector operating in an

insular fashion.
But as restrictions have eased, Indian corporations

are emerging on the world stage and discovering that

the old ways of doing business are no longer
sufficient in such a fast-paced global environment.

CASE STUDY :

Type

Public

Traded as

NASDAQ:GOOG
NASDAQ-100 Component
S&P 500 Component

Industry

Internet, Computer software

Founded

Menlo Park, California, U.S.

(September 4, 1998(1998-09-04))
[1][2]

Founder(s)

Sergey Brin, Larry Page

Headquarters

Mountain View, California, United

States

Area served

Worldwide

Key people

Larry Page
(Co-Founder & CEO)
Eric Schmidt
(Executive Chairman)

Revenue

US$ 37.905 billion (2011)

Operating income

US$ 11.632billion (2011)

Profit

US$ 09.737billion (2011)

Total assets

US$ 72.574billion (2011)

Total equity

US$ 58.145billion (2011)

Employees

33,077 (2012)[3]

Corporate Governance
Guidelines
Googles motto is do not be evil. They believe these

words relate to the way they serve their users.

Their code message is that Google strives towards the
highest possible standards of ethical behaviour.

SERVING THEIR USERS

They have flourished by serving the interests of their users. Their

goal is to build
products that organize the worlds information and make it
available to their users.

Usefulness: products and services to be user friendly and

useful to their
customers.

Honesty:

they want clear and truthful communication with

their customers.

Responsiveness:

they want to be responsive to the

user feedback about

their and services.
Action oriented: they want their product and services
to their customers
to be useful and in case they are not
then, they take
appropriate action to make it useful

RESPECT FOR EACH OTHER

AMONG EMPLOYEES
They create an ambience in which employee can reach

to his full, potential as follows:

Employment provides equal opportunity to all
employees, without any discrimination.
Harassment and discrimination is totally absent from the
firm.
Drugs and alcohol use is not accepted in the firm at all.
Carrying of weapons and any type of violence by the
employees is strictly not accepted.

AVOIDANCE OF CONFLICT OF
INTEREST
Avoidance of conflict of interest is achieved by the following methods:
Openness and transparency is important to work ethics.
Personnel investment in the firms equity is done only after the approval of the

board of directors.
Gifts and entertainments are allowed to be accepted as long as these are of low

value and do not impact on the firms decisions with regard to those offerings
these gifts or entertainment.

PRESERVING
CONFIDENTIALITY
The confidential information could be any of the following:
Financial information, product information and user information, the

information can be given in select cases on a need to know basis only.

Trademarks, logos and copyrights. The name of Google products and services

and the logos connected to these are the firms intellectual property and
unauthorized use could damage their image.
Google partners should not give or receive any confidential information unless

they have cleared with the firms legal department.

Google wants to give the same respect to competitive information as they

expect their competitors would give theirs

Google does not want its employees to even discuss confidential information

on the net or anywhere else, unless the person has been specially authorize to
do

BOOKS AND RECORD-KEEPING

Google believes in accuracy in reporting the financial analysis of the

firm. Every member of the Google team has the responsibility of

seeing that the books are maintained accurately. No one should ever
try to influence the auditing of Googles financial accounts.
The employees are supposed to co operate with accounting and

financial teams; auditors to ensure that the book are accurately

maintained.
The employees must report any irregularities if they observe them,

even the small problems when they are not as per the firms
reporting of Financial and Accounting Concerns Policy.

GOOGLE ASSETS
It is expected that the employees will take care to conserve the

firms assets and equipment. They are provided with all the required
tools for the job they perform.
The firms computers, telephones and other communication

equipments are crucial aspects of the firms property and these

must be looked after well.
While buying from third parties the employees are to get the best

bargains of the firm. All contracts must be vetted by the firms legal
department and signed by only the authorized signatories.

LAWS
The firm takes the responsibility of complying with the laws of the land and

when in doubt about the interpretation of any law the employees are to get in
touch with the firms legal department.
The firm wants from its employees full compliance with the Foreign Corrupt

Practices Act, export control regulations, antitrust laws and other trade
regulation statutes. In case of accepting gifts, any item of value would be
considered as taking a bribe.
Any violation of antitrust law by the employees would not be accepted.

CODE OF CONDUCT
The firm believes that it is not possible to be fully comprehensive with regard

to the code of conduct: they want the employees to refer to the legal
department in case of any doubts in any matter of ethics.

CONCLUSION
At last, it would be appropriate to say that

firstly, there is no unique structure of

corporate governance and secondly,
corporate governance goes far beyond
regulation. The quantity,quality and
frequency of financial and managerial
disclosure, the extent to which the board of
directors exercise their fiduciary
responsibilities towards shareholders, the
quality of information that management
share with their boards and the commitment
to run transparent companies cannot be
legislated at any level of detail..

Thank You