Sebi asks firms to improve quality of disclosures

SEBI should also insist for disclosure of this all information on company website on regular basis, that will provide more easy access to investor to get company specific information instead of searching on stock exchange website. At present many mid and small cap companies website are not functional or not updated for years. Why not maintaining  and updating company website make mandatory under listing agreement.

 http://www.business-standard.com/article/markets/sebi-asks-firms-to-improve-quality-of-disclosures-113111800862_1.html

Investor protection group files case against Sebi, exchanges

Investor protection group files case against Sebi, exchanges


“The stock exchanges have abjectly failed in monitoring listed companies and thousands of companies were not complying with the listing conditions and terms of agreement was well known to Sebi from time to time… Hence Sebi cannot justify its inaction spread over 10 years,” Midas said in the PIL. According to the PIL, the association’s website received 14,000 grievances from investors, out of which around 2,000 were against 450 companies that were suspended by the stock exchanges for non-compliance with the listing agreement.
http://www.livemint.com/2012/05/14222426/Investor-protection-group-file.html?d=2

corporate governance Simple, practical proposals for better reporting of corporate governance

Good corporate governance is essential to create trust and engagement between companies and their investors,
so contributing to the long-term success of the business. And yet even where good corporate governance is in place governance reporting remains for the most part formulaic. by PWC
http://www.pwc.com/en_GX/gx/corporate-reporting/assets/report-leadership-governance-reporting.pdf

Sebi plans platform for minority shareholders - Home - livemint.com

Sebi plans platform for minority shareholders - Home - livemint.com: “The shareholders are dispersed all over the country. They hardly communicate with each other. Even if they attend meetings, they do not have a unified voice,” said the second person. “So, the management and controlling shareholders are hardly under pressure to reverse their decisions.” The population of non-controlling shareholders is large and their votes could act as the most efficient tool to improve corporate governance, he added.

Sebi plans platform for minority shareholders - Home - livemint.com

Sebi plans platform for minority shareholders - Home - livemint.com: “The shareholders are dispersed all over the country. They hardly communicate with each other. Even if they attend meetings, they do not have a unified voice,” said the second person. “So, the management and controlling shareholders are hardly under pressure to reverse their decisions.” The population of non-controlling shareholders is large and their votes could act as the most efficient tool to improve corporate governance, he added.

3 cheers for corporate governance

3 cheers for corporate governance

Asish K Bhattacharyya /  November 28, 2011, 0:33 IST Business Standard

3 cheers for corporate governance: Exit of Mr Akula from SKS Micro finance Limited, the only listed micro finance company, provides some lessons in corporate governance. The first is that holding of majority voting rights by institutions does not necessarily improve corporate governance. The company’s shareholding pattern as at September 2011 was: Promoters: 37%, FII 19%, Indian Financial Institutions: 6%, Indian Bodies Corporate: 14%, Foreign Bodies Corporate: 12 % and others: 12%. Effective corporate governance requires institutions to play their role effectively. That has not happened in the case of SKS. Second is that the corporate governance system comes under stress when a company deviates from its stated vision and mission. The web site of the company articulates the mission as:

With settlement with its agitating workers corporate governance is questioned at Maruti Suzuki

Shyamal Majumdar: In letter, but not in spirit: Shyamal Majumdar: In letter, but not in spirit
Maruti would do well to make adequate disclosures about its private deal with a few union leaders
Shyamal Majumdar / Mumbai�November 11, 2011, 0:34 IST

It took just about a week for Sonu Gujjar to convert his carefully cultivated image of a new-age workers’ hero to that of a traitor — an adjective being used quite liberally these days by his followers who had once trusted him implicitly. In many ways, this is a familiar script — there have been not-so-publicised instances in the past in which the so-called union leaders have led a troop of disgruntled workers to stop production only to slyly broker a side-deal with the management.

Gujjar has since denied receiving Rs 40 lakh from Maruti Suzuki, as the media had reported, and told this newspaper in an interview that he and 29 other suspended employees got Rs 16 lakh each, which included dearness allowance, provident fund and the salary due if they had worked till they were 52 years of age.

Shareholder activism grows from baby steps

Shareholder activism grows from baby steps: Shareholder activism grows from baby steps
N Sundaresha Subramanian, Arijit Barman & Joydeep Ghosh / Mumbai�October 17, 2011, 1:26 IST
It may not be a war cry yet, but the voice is definitely getting shriller. On Friday, worried investors of Maruti Suzuki took the extraordinary step of bypassing the management and spoke directly to the representative of the workers’union. The company is going through a crippling strike, which has taken the stock price to a 52-week low.

Corporate Governance - Value beyond compliance

http://www.kpmg.com/IN/en/IssuesAndInsights/ThoughtLeadership/KPMG-CII_Corporate_Governance_publication.pdf

Nominees still appointed as independent directors

Nominees still appointed as independent directors

Mehul Shah / Mumbai September 29, 2011, 0:27 IST

Some well-known Indian firms continue to classify nominees of institutional shareholders as independent directors on their board -- a practice opposed by the Institute of Company Secretaries of India (ICSI).

At present, Clause 49 of the Listing Agreement allows firms to classify nominee directors as independent directors. However, the new Companies Bill, is likely to be tabled in the coming (winter) session of Parliament, has proposed to disallow this practice, considered unfair to small shareholders. In the final draft of the new Bill, an independent director in relation to a company means a non-executive director of the company other than a nominee director.

http://www.business-standard.com/india/news/nominees-still-appointed-as-independent-directors/450807/

A ranking of listed companies' investor relations practices - The Economic Times

A ranking of listed companies' investor relations practices - The Economic Times: "NEW DELHI: At a time when there is increased focus on corporate governance, a new ranking system developed by a private entity will benchmark the investor relations practices of Indian companies against their global peers.

IR Global Rankings (IRGR) would carry out indexing of companies listed on the Bombay Stock Exchange and the National Stock Exchange.

IRGR's system focuses on investor relations practices that include corporate governance practices and financial disclosure procedures.

'We are honoured and excited to have India as a single region and to be conducting its ranking,' IR Global Rankings Head Luar Huber in a statement.

Many Indian corporates, including the likes of Infosys Technologies, Aditya Birla Nuvo, Sun Pharmaceutical and Tata Consultancy, have already registered themselves for the rankings."

Centre may allow small shareholders to choose director

Centre may allow small shareholders to choose director: "Centre may allow small shareholders to choose director

To pave the way for small groups of shareholders to nominate a director on the board of listed companies, the Ministry of Corporate Affairs (MCA) is set to bring in more clarity to a provision in the Companies Act 1956. A senior government official said the provision was dropped in the Companies Bill 2009 but may find place in the revised Bill. Other emerging economies, including China and Brazil, already have a set procedure in place to empower small shareholders.

Ministry of corporate affairs is expected to specify the procedure to be followed by small shareholders to elect their nominee in the revised Companies Bill 2011. The Act of 1956 allowed a group of 1,000 or more small shareholders to appoint their nominee on the company board, but it lacked clarity."

Pratip Kar: The global market turmoil & Clause 49

Pratip Kar: The global market turmoil & Clause 49: Clause 49 may have become dated. It was incorporated as a new Clause in the Listing Agreement in 2000, subsequently amended in 2004, implemented in 2006 and there was a small amendment in 2008. But the corporate governance landscape, both in India and globally, has changed and is still evolving. There was the global financial crisis in 2008 and, recently, scandals involving some US companies and personalities. In India, we had the accounting scandal at Satyam Computers. The scandal involving Rupert Murdoch and News Corporation is causing endless worries to the Financial Reporting Council in the UK. These have given rise to serious governance issues straddling roles of the boards, independent directors, risk management, executive compensation and ethical and value-based management. Whether the present Clause 49 adequately addresses these issues needs to be examined."

National Voluntary Guidelines on Social, Environmental & Economic Responsibilities of Business (ESG Guidelines)

http://www.mca.gov.in/Ministry/latestnews/National_Voluntary_Guidelines_2011_12jul2011.pdf
Introduction to guidelines
The  Guidelines  presented  herein  are  a  refinement  over  the  Corporate  Social
Responsibility  Voluntary  Guidelines  2009,  released  by  the  Ministry  of  Corporate
Affairs  in  December  2009.  Significant  inputs,  received  from  diverse  stakeholder
groups  across  the  country  have  been  duly  considered,  and  based  on  these  inputs;
appropriate changes have been made in the original draft Guidelines produced by the
Guidelines Drafting Committee. This document therefore represents the consolidated
perspective  of  vital  stakeholders  in  India,  and  accordingly  lays  down  the  basic
requirements  for  businesses  to  function  responsibly,  thereby  ensuring  a  wholesome
and inclusive process of economic growth.

Mandate  and  process: These Guidelines  have  been  developed through  an  extensive
consultative  process  by  a  Guidelines  Drafting  Committee  (GDC)  comprising
competent  and  experienced  professionals  representing  different  stakeholder  groups.
The  GDC was  appointed  by the  Indian  Institute  of Corporate Affairs  (IICA) with  a
clear  brief that the Guidelines  must  provide  a  distinctively  'Indian' approach,  which
will  enable  businesses  to  balance  and  work  through  the  many  unique  requirements
of  our  land.  The  process  that  was  followed  in  developing  these  Guidelines  relied
heavily  upon  developing  a  consensus  on  various  ideas  that  emerged  from  various
stakeholder  groups.  Leading  trade  and industry  chambers,  who  were  represented  in
the  GDC  as  well  as  actively  engaged  in  the  consultative  process,  have  been  key
partners in the development of this consensus.
Applicability: The Guidelines are designed to be used by all businesses
irrespective  of  size,  sector  or  location  and  therefore  touch  on  the  fundamental
aspects  –  the  'spirit'  -  of  an  enterprise.  It  is  expected  that  all  businesses  in  India,
including multi-national  companies that  operate in the  country,  would  consciously
work towards  following the  Guidelines. The  Guidelines  also  provide  a  framework
for  responsible  business  action  for  Indian  MNCs  planning  to  invest  or  already
operating  in  other  parts  of  the  world.  Businesses  are  encouraged  to  move  beyond
the recommended minimum provisions articulated in the document.
For  business  leaders  and  managers  entrusted  with  the  task  of  deploying  the
principles  of  Responsible  Business,  it  is  worthwhile  to  understand  that  business
boundaries  today  extend  well  beyond  the  traditional  walls  of  a  factory  or  an
operating  plant  and  all  the  way  across  the  value  chain.  Businesses  are  therefore
encouraged to ensure that not only do they  follow the Guidelines  for areas directly
within  their  immediate  control  or  within  their  sphere  of  influence,  but  that  they
encourage  and  support their  vendors,  distributors,  partners  and  other  collaborators
across their value chains to follow the Guidelines as well.
The  Guidelines  are  applicable  to  all  such  entities,  and  are  intended  to  be  adopted
by them comprehensively, as they raise the bar in a manner that makes their valuecreating  operations  sustainable.  It  needs  to  be  emphasized  that  all  Principles  are
equally important  and  non-divisible  – this implies that if  a  business  endeavours to
function  responsibly, it would have to adopt each of the nine  (9) principles in their
entirety rather than picking and choosing what might suit them.

CORPORATE SOCIAL RESPONSIBILITY VOLUNTARY GUIDELINES 2009

http://www.mca.gov.in/Ministry/latestnews/CSR_Voluntary_Guidelines_24dec2009.pdf

Fundamental Principle
Core Elements:
Each  business  entity  should  formulate  a  CSR  policy  to  guide  its
strategic planning and provide a roadmap for its CSR initiatives, which
should be an integral part of overall business policy and aligned with its
business goals. The policy should be framed with the participation of
various level executives and should be approved by the Board.
The CSR Policy should normally cover following core elements:
1. Care for all Stakeholders:
The  companies  should  respect  the  interests  of,  and  be  responsive
towards all stakeholders, including shareholders, employees,
customers, suppliers, project affected people, society at large etc. and
create value for all of them. They should develop mechanism to actively
engage with all stakeholders, inform them of inherent risks and mitigate
them where they occur.
2. Ethical functioning:
Their  governance  systems  should  be  underpinned  by  Ethics,
Transparency and Accountability. They should not engage in business
practices that are abusive, unfair, corrupt or anti-competitive.

GUIDELINES
Ministry of Corporate Affairs3. Respect for Workers' Rights and Welfare:
Companies  should  provide  a  workplace  environment  that  is  safe,
hygienic  and  humane  and  which  upholds  the  dignity  of  employees.
They  should  provide  all  employees  with  access  to  training  and
development of necessary skills for career advancement, on an equal
and  non-discriminatory  basis.  They  should  uphold  the  freedom  of
association  and  the  effective  recognition  of  the  right  to  collective
bargaining  of labour,  have  an  effective  grievance  redressal  system,
should  not  employ  child  or  forced  labour  and  provide  and  maintain
equality of opportunities without any discrimination on any grounds in
recruitment and during employment.
4. Respect for Human Rights:
Companies should  respect human  rights for all and avoid complicity
with human rights abuses by them or by third party.
5. Respect for Environment:
Companies  should  take  measures  to  check  and  prevent  pollution;
recycle, manage and reduce waste, should manage natural resources
in a sustainable manner and ensure optimal use of resources like land
and  water,  should  proactively  respond  to  the  challenges  of  climate
change by adopting cleaner production methods, promoting efficient
use of energy and environment friendly technologies.
6. Activities for Social and Inclusive Development:
Depending  upon  their  core  competency  and  business  interest,
companies  should  undertake  activities  for  economic  and  social
development of communities and geographical areas, particularly in the
vicinity of their operations. These could include: education, skill building
for  livelihood  of  people,  health,  cultural  and  social  welfare  etc.,
particularly targeting at disadvantaged sections of society.
Implementation Guidance:
1.  The  CSR  policy  of  the  business  entity  should  provide  for  an
implementation strategy which  should include  identification of
projects/activities, setting measurable physical targets with timeframe,
organizational  mechanism  and  responsibilities,  time  schedules  and
monitoring.  Companies  may  partner  with  local  authorities,  business
associations  and  civil  society/non-government  organizations.  They
may  influence  the  supply  chain  for  CSR  initiative  and  motivate
employees for voluntary effort for social development. They may evolve
a  system  of  need  assessment  and  impact  assessment  while
undertaking CSR activities in a particular area. Independent evaluation
may  also  be  undertaken for  selected  projects/activities from time to
time.
2. Companies should allocate specific amount in their budgets for CSR
activities.  This  amount  may  be  related  to  profits  after  tax,  cost  of
planned CSR activities or any other suitable parameter.
3.  To  share  experiences  and  network  with  other  organizations  the
company  should  engage  with  well  established  and  recognized
programmes/platforms which encourage responsible business
practices and CSR activities. This would help companies to improve on
their CSR strategies and effectively project the image of being socially
responsible.
4.  The  companies  should  disseminate  information  on  CSR  policy,
activities and progress in a structured manner to all their stakeholders
and the public at large through their website, annual reports, and other
communication media.