The Institute of Company Secretaries of India (ICSI) has formed a seven-member committee to look into ways to strengthen corporate governance norms in the aftermath of the Satyam scandal.
“The ICSI Council, in its recent meeting, deliberated the matter in detail and constituted a core group consisting seven members to go into the issues arising out of the Satyam episode and suggest steps to strengthen the governance framework amongst corporates as well as changes in the legal policy framework regulating the corporates and professionals,” its president Datla Hanumanta Raju said.
ICSI has also been assisting the government in its investigation into the Satyam scam and has sought answers from the scam-hit IT major’s company secretary, asking him to furnish details related to adherence of corporate governance norms. “We have received a report from the company, but have sought more details,” Raju said. ICSI had asked Satyam’s company secretary to furnish the company’s balance sheet, annual report and corporate governance reports for the last few years.
ICSI’s core group would look into a host of issues related to corporate governance compliance. “The primary area being looked into would be related to disclosure and transparency made in terms of board processes and agenda papers. Also, the core group would look into the role of independent directors and how they can be an effective tool against such frauds,” ICSI CEO NK Jain said. Related-party transactions would also be an area on which the ICSI core group would deliberate, he added.
“The idea is to identify inherent weakness in the system and suggest ways to plug loopholes,” he said. ICSI has also been training independent directors on how they should act as effective checks against any malpractice in a company. “This is certainly our core area. ICSI has already trained directors of LIC who are on the boards of various companies. Also, we are doing a similar program for directors of PNB,” Jain said.