Govt to set up agency for corporate governance
The company affairs ministry has decided to have an umbrella agency of corporate governance which will set non-binding standards in line with the principles developed by the Organisation for Economic Co-operation and Development.
By Gireesh Chandra Prasad, TNN |
NEW DELHI: The company affairs ministry has decided to have an umbrella agency of corporate governance which will set non-binding standards in line with the principles developed by the Organisation for Economic Co-operation and Development (OECD). This is to advocate the ���spirit��� of governance to the industry, which sometime gets lost as companies follow the market regulator���s norms by the letter.
The National Foundation for Corporate Governance (NFCG), set up jointly by the company affairs ministry, the industry and professional regulators of accountants and company secretaries, will act as this agency and will initially evolve corporate governance principles in three areas ��� institutional investors, independent directors and auditing.
These would be in line with the principles the 30-member international policy advocating body has developed. OECD norms on taxation are widely appreciated. While NFCG guidelines will remain non-binding, the ministry wants it to have the sanctity of a sought after endorsement, said a senior official.
NFCG, which met in the capital on August 23 chaired by company affairs minister Prem Chand Gupta and attended by Infosys chairman NR Narayana Murthy, has also got the external affairs ministry nod to talk to four international bodies working on corporate governance such as Global Corporate Forum jointly set up by the World Bank and OECD.
The ministry of company affairs will take part in OECD���s two-day Asian round table on corporate governance beginning on September 8 in Indonesia for finalising a draft policy on corporate governance in Asian banks.
Discussions would include the characteristics of Asian banks, fiduciary duties of board members, board���s committees, firewalls against abusive related party transactions and lending, corporate governance of group companies affiliated with banks and the role of banks in improving the governance of their debtor companies. The meet would also present guidelines on governance in state owned enterprises it has finalised in April this year.
The government is now also working on setting up national centres for corporate governance at various Indian Institutes of Management.
The National Foundation for Corporate Governance (NFCG), set up jointly by the company affairs ministry, the industry and professional regulators of accountants and company secretaries, will act as this agency and will initially evolve corporate governance principles in three areas ��� institutional investors, independent directors and auditing.
These would be in line with the principles the 30-member international policy advocating body has developed. OECD norms on taxation are widely appreciated. While NFCG guidelines will remain non-binding, the ministry wants it to have the sanctity of a sought after endorsement, said a senior official.
NFCG, which met in the capital on August 23 chaired by company affairs minister Prem Chand Gupta and attended by Infosys chairman NR Narayana Murthy, has also got the external affairs ministry nod to talk to four international bodies working on corporate governance such as Global Corporate Forum jointly set up by the World Bank and OECD.
The ministry of company affairs will take part in OECD���s two-day Asian round table on corporate governance beginning on September 8 in Indonesia for finalising a draft policy on corporate governance in Asian banks.
Discussions would include the characteristics of Asian banks, fiduciary duties of board members, board���s committees, firewalls against abusive related party transactions and lending, corporate governance of group companies affiliated with banks and the role of banks in improving the governance of their debtor companies. The meet would also present guidelines on governance in state owned enterprises it has finalised in April this year.
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The government is now also working on setting up national centres for corporate governance at various Indian Institutes of Management.
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