A notes on Corporate Governance

1. Smoking is injurious to healthSmoking is injurious to health

2. Drinking is injurious to healthDrinking is injurious to health
and wealthand wealth

3. AARKEY CREATIVE WORKSAARKEY CREATIVE WORKS
PRESENTSPRESENTS

4. VASISTA ARTSVASISTA ARTS

5. Corporate GovernanceCorporate Governance
BYBY
RAAAMA KRISHNA. ARAAAMA KRISHNA. A

6. Why Corporate Governance?Why Corporate Governance?
 Better access to external financeBetter access to external finance
 Lower costs of capital – interest rates onLower costs of capital – interest rates on
loansloans
 Improved company performance –Improved company performance –
sustainabilitysustainability
 Higher firm valuation and shareHigher firm valuation and share
performanceperformance
 Reduced risk of corporate crisis andReduced risk of corporate crisis and
scandalsscandals

7. Corporate Governance PartiesCorporate Governance Parties
 Shareholders – those that own theShareholders – those that own the
companycompany
 Directors – Guardians of the Company’sDirectors – Guardians of the Company’s
assets for the Shareholdersassets for the Shareholders
 Managers who use the Company’s assetsManagers who use the Company’s assets

8. Four PillarsFour Pillars
of Corporate Governanceof Corporate Governance
 AccountabilityAccountability
 FairnessFairness
 TransparencyTransparency
 IndependenceIndependence

9. AccountabilityAccountability
 Ensure that management isEnsure that management is
accountable to the Boardaccountable to the Board
 Ensure that the Board is accountableEnsure that the Board is accountable
to shareholdersto shareholders

10. FairnessFairness
 Protect Shareholders rightsProtect Shareholders rights
 Treat all shareholders including minorities,Treat all shareholders including minorities,
equitablyequitably
 Provide effective redress for violationsProvide effective redress for violations

11. TransparencyTransparency
Ensure timely, accurate disclosure on allEnsure timely, accurate disclosure on all
material matters, including the financialmaterial matters, including the financial
situation, performance, ownership andsituation, performance, ownership and
corporate governancecorporate governance

12. IndependenceIndependence
 Procedures and structures are in place soProcedures and structures are in place so
as to minimise, or avoid completelyas to minimise, or avoid completely
conflicts of interestconflicts of interest
 Independent Directors and Advisers i.e.Independent Directors and Advisers i.e.
free from the influence of othersfree from the influence of others

13. Elements of Corporate GovernanceElements of Corporate Governance
 Good Board practicesGood Board practices
 Control EnvironmentControl Environment
 Transparent disclosureTransparent disclosure
 Well-defined shareholder rightsWell-defined shareholder rights
 Board commitmentBoard commitment

14. Good Board PracticesGood Board Practices
 Clearly defined roles and authoritiesClearly defined roles and authorities
 Duties and responsibilities of DirectorsDuties and responsibilities of Directors
understoodunderstood
 Board is well structuredBoard is well structured
 Appropriate composition and mix of skillsAppropriate composition and mix of skills

15. Control EnvironmentControl Environment
 Internal control proceduresInternal control procedures
 Risk management framework presentRisk management framework present
 Disaster recovery systems in placeDisaster recovery systems in place
 Media management techniques in useMedia management techniques in use

16. Control EnvironmentControl Environment
 Business continuity procedures in placeBusiness continuity procedures in place
 Independent external auditor conductsIndependent external auditor conducts
auditsaudits
 Independent audit committee establishedIndependent audit committee established
 Internal Audit FunctionInternal Audit Function

17. Transparent DisclosureTransparent Disclosure
 Financial Information disclosedFinancial Information disclosed
 Non-Financial Information disclosedNon-Financial Information disclosed
 Financials prepared according toFinancials prepared according to
International Financial ReportingInternational Financial Reporting
Standards (IFRS)Standards (IFRS)

18. Transparent DisclosureTransparent Disclosure
 Companies Registry filings up to dateCompanies Registry filings up to date
 High-Quality annual report publishedHigh-Quality annual report published
 Web-based disclosureWeb-based disclosure

19. Well-Defined Shareholder RightsWell-Defined Shareholder Rights
 Minority shareholder rights formalisedMinority shareholder rights formalised
 Well-organised shareholder meetingsWell-organised shareholder meetings
conductedconducted
 Clearly defined and explicit dividend policyClearly defined and explicit dividend policy

20. Board CommitmentBoard Commitment
 The Board discusses corporate governanceThe Board discusses corporate governance
issues and has created a corporateissues and has created a corporate
governance committeegovernance committee
 The company has a corporate governanceThe company has a corporate governance
championchampion
 A corporate governance improvement planA corporate governance improvement plan
has been createdhas been created

21. Board CommitmentBoard Commitment
 Policies and procedures have beenPolicies and procedures have been
formalised and distributed to relevant staffformalised and distributed to relevant staff
 A code of ethics has been developedA code of ethics has been developed
 The company is recognized as a corporateThe company is recognized as a corporate
governance leadergovernance leader

22. Other EntitiesOther Entities
 Corporate Governance applies to all typesCorporate Governance applies to all types
of organisations not just companies in theof organisations not just companies in the
private sector but also in the not for profitprivate sector but also in the not for profit
and public sectorsand public sectors
 Examples are NGOs, schools, hospitals,Examples are NGOs, schools, hospitals,
pension funds, state-owned enterprisespension funds, state-owned enterprises