More teeth for corporate governance Essay Example

structure helps monitor the means of attaining the objectives and oversees performance. Investors are assured that the financial resources of the company in which they have invested, are handled in the most efficient manner and corporate wealth is created in within the confines of the law.Accordingly, the key to corporate governance lies in transparency in decision-making and accountability to safeguard the interests of the stakeholders and the investors. Ultimately all this helps create a self-driven, self-assessed and self-regulated organisation.

The functions of the board of directors now include:

has been tasked with the adoption of a formal code of conduct for senior management and the certification of financial statements issued by the CEO or the CFO.Accordingly, companies are now required to form various committees like a 'nomination committee', 'compensation committee', 'governance committee' and other committees like to adhere to corporate governance.The function of the 'compensation committee' for instance, is to ensure credible and transparent policy in determining and accounting for specific remuneration packages for executive directors including pension rights and any compensation payment. The committee should be in a position to bring about objectivity in determining the remuneration package while striking a balance between the interest of the company and the shareholders.

Similarly, the law requires the nomination committee of the board to be composed entirely of independent directors, who will be responsible for the evaluation and nomination of board members. In India, the responsibilities of 'audit committee' include scrutiny of the company's annual audited financial statements, appointment of external auditors, interacting with internal auditors and issues relating to internal controls existing in the company. Globally, it is the analysis of the financial reporting process, internal control systems and the overview of the legal and ethical conduct of management as well as the staff that has been received greater focus.Ultimately, corporate governance is the net result of the individual sense of values, the values held in society or part of a society like professional bodies or business associations and finally the system

of public governance.India has, by and large, enjoyed a history of compliance to legal and ethical standards in business and Indians strive to be good business partners.

Our commitment to ethical and moral standards of business conduct must be capable of withstanding the most rigorous scrutiny.