The Institute of Chartered Accountants of India (ICAI) is planning to set up a rating system for corporate governance for listed and unlisted entities. It is aiming to bring in internationally best practices and new code of conduct. The apex statutory body of CAs, established under the Chartered Accountants Act, 1949, is in the process of forming a high-power committee to shape the model code of conduct. The proposed group will consist of 7-9 members from various fields, besides CAs.
ICAI is the world’s second-largest accountants’ body with membership base of 1.50 lakh professionals and 4.50 lakh students. The institute intends to take an aggressive stand after the Satyam Computer Services promoters and auditors were accused of misconduct. The new code of conduct would be primarily for its members who will implement it in their respective organisations and among clients. However, it will make an attempt to get recognition from regulators and authorities like Sebi, RBI and Irda, among others.
“Under different regulations, we have an existing framework for corporate governance. However, industry is following it for compliance purpose only and not in true spirit,” ICAI president Uttam Agarwal told ET. He added that the institute would conduct awareness programmes for its members, industry and even regulators.
It is learnt that ICAI is eyeing to tap the large section of industrial and financial houses that are not covered under the Clause 49 of the Listing Agreement to the Indian stock exchanges. The decisions regarding setting up a group for new code of conduct and rating system were taken during the recent meet of members of committee on corporate governance in Delhi. Mr Agarwal, who also heads the six-member special committee to look into the Satyam fiasco and role of auditors, also attended the meet.
“We already have different regulatory frameworks in place to ensure good corporate governance. However, we intend to keep pace with the changing time and have a better code of conduct in place. ICAI, being the apex body for CAs, can play an important role in ensuring good governance,” said ICAI’s committee on corporate governance chairman Pankaj Jain. He added that ICAI is already working closely with the Union ministry of corporate affairs’ National Foundation for Corporate Governance.