Good corporate governance practice calls for implementation and maintenance of sound standards of business conduct of affairs of a company. Thus fair and transparent manner of carrying out business by adopting highest standards of professionalism, honesty, integrity and ethical behavior together with complete compliance of laws are the prime necessities.
As a good corporate governance measure the new Companies Act 2013 and the listing agreement have provided elaborately for a company to formulate a Policy of remuneration of its Directors, KMP and other employees. The relevant provisions shall have to be kept in view as well as each company shall have the flexibility to lay down its criteria as best suited to it and the business environment in which it functions.
In the Board’s Report a statement has to be given indicating the manner in which formal annual evaluation has been made by the Board of its own performance and that of its committees and individual directors [Section 134 & Companies { Accounts} Rules 2014}].
Carrying on business activities entails many issues one of which is parties entering into various contracts which lay down the terms and conditions. Although, generally, efforts are made for unhindered implementation of the contracts, it may so happen that, in their performance, disputes could arise which the existing stipulations could not have taken into account.
In order to promote and maintain sound standards of business Conduct and Corporate Governance, the Board has laid down, and from time to time circulated, the “Code of Conduct” { the Code} of the Company for directors and senior management, compliance of which is an obligation. In terms of the Code, the Board expects the employees to bring to their attention or to that of Senior Management any breach or suspected breach of the Code.
Amitav Ganguly {New Section 194 of the Companies Act 2013} BACKGROUND There exist well established judicial precedents as well laws that the directors have fiduciary obligations and also duties to act reasonably and honestly in the best interests of the companies where they hold such positions. Their duties emanate due to holding positions which may […]
The disclosure of interest by a director is a statutory duty arising out of distinctive position held by him. Such position does pose some ambiguity. It is very well possible that in the first instance even a director may not be able to give a clear reply about his legal position.
Ministry of Corporate Affairs {MCA} vide its Circular no. 17/2011 dated 21-4-2011 and no. 18/2011 dated 29.4.2011 had given clarifications regarding sending copies of Balance Sheets and Auditors Report etc { documents} to the members of a company under section 219 of the Companies Act 1956 {erstwhile} through electronic mode.
The position of Directors does pose some ambiguity. It is very well possible that in the first instance even a director may not be able to give a clear reply about his legal position. To understand this intricate subject one has to fall back upon the basics of the corporate existence, where and how the directors fit in, and a plethora of court judgements constituting precedent laws.
Amitav Ganguly MANDATING AND MEANING OF DIVERSITY The listing agreement under Securities Contracts {Regulation} Act 1956, for the first time has mandated companies whose shares are listed on stock exchanges to formulate, publish and implement a Board Diversity Policy. The term “diversity” of Board of Directors {Board} has not been defined in the Companies Act […]
