The principal role of the board of directors – as representatives of the shareholders, is to oversee the function of the organization and ensure that it continues to operate in the best interests of all stakeholders. Given the complexity of today’s organizations, that is no simple or straightforward task. Today, board effectiveness is a key performance driver of the Indian companies.

With expectations of them continuing to increase, boards can take several actions to govern more effectively. Indian boards must move away from being a rubber stamp to being a strategic asset for the company. They need to set the tone from top in promoting a transparent culture that promotes effective dialogues among the directors, senior management, and various function and risk managers. Boards should look beyond the ‘old boy network’ and select directors with individual areas of expertise, and invest on an ongoing basis on their formal and informal education. Independent directors should significantly contribute to the functioning of the board through requisite understanding of the company and the business. Boards must take a hard look at its own performance evaluation and enable continuous feedback and communication cycle.

Effective boards build capabilities within themselves and their organizations that allow them to do both, protect existing assets (compliance role), as well as, manage threats to future growth (strategy oversight role). This section of the site includes a range of useful publications relating to improving the effectiveness of the board.

Shareholder Participation

Shareholders activism – Healthy trend for corporate governance

Shareholders activism is very much essential for good governance of companies. The proposal in the Companies Bill 2008 to grant recognition to shareholders associations is indeed welcome. How a provision in Company Law to enable class action suits by shareholders will help better governance, is what is probed in this document.

> Download PDF

Posted with permission from the Institute of Company Secretaries of India, copyright 2009.

The effects of ownership structure on corporate governance and performance

Theoretical and applied work on corporate governance systems point to the importance of the structure of ownership and control in setting the background for the corporate governance issues that can arise in reality. The document explores this along the three aspects - the structure of ownership and its concentration, the instruments of control, and the exercise of control.

> Download PDF

Posted with permission from National Foundation for Corporate Governance, copyright 2009.

Impact of postal ballot mechanism in improving participation

The postal ballot system has been introduced with a view to enlist wider and active shareholder participation in company management. To what extent this has improved the shareholder participation in corporate decision making is sought to be found out through a simple study conducted by the authors. The findings of the study and interesting revelations are reflected here.

> Download PDF

Posted with permission from the Institute of Company Secretaries of India, copyright 2009.

Can a company cancel or postpone a general meeting

Adjournment of a meeting is different from postponement. On postponement the Companies Act is silent but the settled legal position is that a meeting once convened cannot be cancelled or postponed. Does a company board have implied or an ancillary power to postpone or cancel a duly convened meeting is the question examined in the light of some decided cases.

> Download PDF

Posted with permission from the Institute of Company Secretaries of India, copyright 2009.

Laws and Regulations

Critical issues regarding directors (Chapter XI) in Companies Bill 2008

Most of the proposals in the Bill relating to directors are more or less the same as at present. But there are some new provisions on the role and responsibilities of directors. This article makes a critical analysis of significant proposals relating to directors.

> Download PDF

Posted with permission from the Institute of Company Secretaries of India, copyright 2009.

Directors: Companies Bill 2008

A company being an artificial person incapable of acting by itself, it is the Board of Directors which is the brain and steers the affairs of the company. The salient features of the Companies Bill, 2008 relating to directors have been brought out vividly here.

> Download PDF

Posted with permission from the Institute of Company Secretaries of India, copyright 2009.

Indian LLP is a mix of UK and Singapore model

Though the concept of limited liability partnership and the need for a statutory framework thereof have been actively discussed and debated for over two decades in India, only recently these have materialized with the enactment of the limited liability partnership Act, 2008. The salient features of this new act and how it is different from the Act of other countries have been dealt with exhaustively in this article.

> Download PDF

Posted with permission from the Institute of Company Secretaries of India, copyright 2009.

 

Dig Deeper

The ABCs of boardroom dynamics

The dynamic forces of globalization, technology, and demographics and a difficult economic climate have converged to dramatically reshape the world of commerce. The document discusses how today’s boards can meet the challenges of the rapidly changing business environment by bringing together some dynamic forces of their own — the “ABCs of corporate governance.”

> Download PDF

Growing challenges in corporate governance

This article examines the Indian corporate governance scenario in the light of recent corporate fraud at a large India IT company and offers possible solutions which can be considered to reform the governance framework in the country.

> Download PDF

Posted with permission from the Institute of Chartered Accountants of India, copyright 2009.

Duties, roles and responsibilities of directors

It is the responsibility of the entire board of directors to ensure that good corporate governance is in place in the company and that it is continually improved upon by bringing the best global practices. The document describes the duties, roles, and responsibilities of directors in promoting corporate governance as a differentiating competitor for their organization.

> Download PDF

Posted with permission from the Institute of Company Secretaries of India, copyright 2009.

Corporate policies and practices: Key to improved governance

One important area which can strengthen corporate governance is the existence of good corporate policies and practices which determine the interaction between employees, directors, company and outsiders. The document describes how the acts, work, approach and conduct of directors, employees and other agents improve overall quality of governance in an organization.

> Download PDF

Posted with permission from the Institute of Company Secretaries of India, copyright 2009.

In the dark

This global survey finds many board members and senior executives are still in the dark about the overall health of their organizations and have a lack of high-quality non-financial data that they can act upon.

> Download PDF

Review report on corporate governance practices of Indian corporates

The study report examines the practice of corporate governance in 42 companies across 12 sectors that represent the vital sections of the Indian industry. It also points out concerns about quality of enforcement, companies taking box ticking approach, deviating from the spirit of compliance laws. It also suggests strengthening evaluation processes of the functioning of the board and its subcommittees.

> Download PDF

Posted with permission from National Foundation for Corporate Governance, copyright 2009.

Enhancing board effectiveness: A roundtable discussion

As corporations grow in size and complexity and are increasingly doing business in the global arena, it has become essential for boards to uphold the highest standards of corporate governance and to perform their role effectively. The document provides a thematic summary of an informal roundtable discussion by eminent personalities from Indian corporates.

> Download PDF

Posted with permission from SpencerStuart, copyright 2009.

Best practices in corporate governance by medium sized family managed public listed companies

The report discusses the best practices in corporate governance adopted by selected medium-sized family managed companies. The report also observes that some of India’s family managed companies demonstrated excellent corporate governance practices even going far beyond mere compliance, while there were many companies which complied with regulatory corporate governance norms only in letter.

> Download PDF

Posted with permission from National Foundation for Corporate Governance, copyright 2009.

Corporate governance: A long term consciousness perspective

Effective implementation of an ethical ideal or concept requires two factors: creating an ethical consciousness and promoting ethical conduct and behaviour. But for the outer conduct and behaviour to be authentic, sincere and effective, it has to be a spontaneous expression of a corresponding inner state of consciousness. This article examines the concept and practice of corporate governance in an integral, holistic and consciousness perspective.

> Download PDF

Posted with permission from the Institute of Chartered Accountants of India, copyright 2009.


Tools

Board orientation template

The needs of a board orientation program will vary based on industry factors, regulatory requirements, knowledge of board members, and company specifics, among other things. Thus, it is impossible to design a single, comprehensive board orientation program that would be appropriate for all companies. However, there are various items that may be included. This tool provides a list of potential topics that may be included.

> Download PPT