The government on Wednesday said that the Securities and Exchange Board of India (Sebi) guidelines which require listed companies to meet corporate governance norms for best practices in management may now be extended to unlisted companies as well.
“We are harmonising. The appropriate best practices that are seen in Clause 49 (of Sebi’s Listing Agreement) will have to be brought in the new Companies Bill,” Corporate Affairs Minister Salman Khurshid told reporters when asked whether the provisions of this clause would be extended to unlisted companies as well.
Best practice standards have to be imposed on everyone appropriately, he told reporters on the sidelines of an Assocham event on accountability and transparency.
“But the compliance cost has to be kept in mind, looking at different levels and sizes of companies,” the Corporate Affairs Minister said.
The new Companies Bill was tabled in Parliament last year and is currently with the Standing Committee.
Clause 49 of Sebi’s listing agreement requires companies to fill half of their board with independent directors if the chairman is executive and one-third if the chairman is non-executive.
The Companies Bill 2009 has slightly different norms for listed companies.
Clause 49 also requires companies to establish and maintain internal controls, submit a quarterly compliance report to stock exchanges, enclose a separate section on corporate governance in annual reports and have an audit committee.
Khurshid said the best of these provisions may be extended to unlisted companies as well.
I too support the contention that corporate governance norms for best practices should be uniform for the listed as well as unlisted companies.
There is black sheep both in the listed and unlisted companies. It is not easy to conclude that only the listed companies follow the best practices in the matter of corporate governance.
I entirely endorse the views of the three previous commentators and, in particular, share the feelings of TNT Nayar on the inexplicably long time taken by the government in this regard. Of course. people learn slowly and over time, but the learning curve of the top most and the blue eyed (GENERALIST) bureaucrats of the country, with their all pervading and all-inclusive knowledge of all subjects on the earth/hemisphere, would appear to be rather painfully slow, like that of spastics.
But, better late than never!
So, Mr. Nayar can rest assured, the IAS, though famously slow and sluggish-and dancing to the lure of money-power and/or to the tunes of their political masters, will also grow uo in time in respect all other issues too.
This is a wlecome development.I dont know why it take long to have comprehensive/harmonised laws to bring in transparency and accountability in all kinds of corporate activity.Such laws/regulatios need not be the same in the literal sense, very much similar in intent and content.
This has been long overdue. By being precluded from thr purview of quite a number of management-discipline-related restrictions, these companies have been playing truant with the people for a very long time, and even operating as safe parking havens for illegally earned/received funds and also laundering the same.
It is good that the SEBI has finally hit upon this idea. I fully support CMA, RL Garg-FICWA on the issue of transparency which is a conspicuous feature of our national character, in all fields of life. The State machinery (along with the three limbs of the State), the government, the constitutional authorities, the political parties, the sports bodies (like the BCCI-ref. IPL!), the local bodies/authoritiies/municipalities/civic bodies, all PSUs, the universities and educational institutions, all corporate bodies/business houses/business organisations, the NGOs (including those very NGOs who claim to be fighters for transparency and integrity and talk of Integrity Pacts in the PSUs), the private clubs-and even the family units in India- have this disease.
more trnsperancy is needed in closely held companies