Corp Govern

8/7/2019 Corp Govern

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A SEMINAR ON CORPORATE

GOVERNANCE

PRESENTATION BY,A. RAJALAKSHMI,

II MBA


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CONTENTS

Meaning

Why corporate governance ?

Impact of corporate governance Problems

Challenges

Solutions

Models

Benefits

Casestudy


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MEANING

Corporate governance is the set of processes,

customs, policies, laws, and institutions affecting

the way a corporation (or company) is directed,

administered or controlled.

Corporate governance also includes the

relationships among the many stakeholders

involved and the goals for which thecorporation is governed.


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WHY CORPORATEGOVERNANCE?

The players in the field are many. Competition

brings in its wake weakness in standards of

reporting and accountability.

Market conditions are increasingly becoming

complex in the light of global development.


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PROBLEMS OF

CORPORATE GOVERNANCE

Demand for information

Supply of accounting information


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A lack of commitment and leadership

change at political, regulatory and board,and executive levels.

Not appointing suitably qualified or

independent thinking directors with relevant

business skills.


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SOLUTIONS

Rethink approach to corporate governance.

Address the problem from the corporate side to

enable those responsible to understand thesubstance of what is happening in the

corporation.

Give managers, boards, and committees the

tools to govern the actual corporate business.


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CorporateGovernance pillars


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TWO MODELSOFCORPORATEGOVERNANCE

Outsider (shareholders) model

Insider (stakeholders) model


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THEOUTSIDER MODEL

A priority to market regulation

the owners of firms tend to have a transitory interestin the firm

The absence of close relationships betweenshareholders and management

the existence of an active `market for corporatecontrol


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THEINSIDER MODEL

The priority to stakeholders control

The owners of firms tend to have an enduringinterest in the company

They often hold positions on the board ofdirectors or other senior managerial positions

The relationships between management andshareholders are close and stable

the existence of formal rights for employees toinfluence key managerial decisions


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DOSFORGOODCORPORATE

GOVERNANCEPRACTICES

y Attend Board meetings regularly and participate inthe deliberations and discussions effectively.

y Study the Board papers thoroughly and enquire

about follow-up reports on definite time schedule.

y Involve actively in the matter of formulation of general policies.

y Be familiar with the Board objectives of theorganization and the policies laid down by thegovernment and the various laws and legislations.

y Ensure confidentiality of the organization's agendapapers, notes and Minutes.


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DONTS

y Do not interfere in the day to day functioning of theorganization.

y Do not reveal any information relating to any constituent ofthe organization to anyone.

y Do not display the logo / distinctive design of theorganization on their personal visiting cards / letter heads,excluding whole time Directors Chairman and managingDirector and Executive Director.

y Do not sponsor any proposal relating to loans, investments,

buildings or sites for organizations premises, enlistment orempanelment of contractors, architects, auditors, doctors,lawyers and other professionals etc and also purchase of anybook, literature, materials, etc.


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BENEFITS OF GOOD CORPORATE

GOVERNANCE

Having better access to external finance.

Lower costs of capital.

Improved company performance. Higher firm valuation and share performance.

Reduced risk of corporate crises and scandals


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&


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THEINFOSYS MODEL

Action against any employee for violation istaken seriously

Prohibition of exploitation of corporateopportunities

Protection of companys confidentialinformation

Use of assets

An entire section on responsibilities tocustomers and stakeholders.


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NARAYANAMURTHYSGLOBAL

STRATEGY

1) Global Delivery Model Producing where it is mostcost effective to produce & selling where it is most

profitable to sell.

2) Moving up the Value Chain Getting involved in asoftware development project at the earliest stage of itslife cycle.

3) PSPD Model Predictability of Revenues,Sustainability of Revenues, Profitability, Decision-making and risk taking


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GrowingProfits and

Reputation

Good CorporateGovernance

is key to


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Corp Govern

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