Explain Clause 49 Of Listing Agreement Of Corporate Governance

There are two types of management in the corporate hierarchy: revised Section 49 adequately advanced the original intent to protect the interests of investors by improving governance practices and advertising. Five major themes dominate. The criteria for the independence of directors have been clarified. The duties and responsibilities of the Board of Directors have been strengthened. The quality and quantity of data has improved. The audit committee`s duties and responsibilities in all matters relating to internal controls and financial reporting have been consolidated and the responsibility of the Executive Branch – in particular the CEO and CFO – has been improved. In each of these areas, the revised Article 49 is part of the field of global best practices (and sometimes beyond). The concept of corporate governance in India is not very old. For the first time, the ICN set up a task force in 1995 under The pulse of Mr.

Bajaj. Based on this publication, CII published a voluntary code entitled "Desirable Corporate Governance" in 1998. SEBI had also set up a small number of committees on corporate governance, including the remarkable kumarmanlagam Birla (2000), the Naresh Chandra Committee (2002) and the Narayana Murthy Committee (2002). While the Kumarmangalam Birla Committee presented mandatory and non-compulsory requirements, the Naresh Chandra Committee examined in depth the relationship between auditors and society, the rotation of auditors/partners, the procedure for appointing controllers to audit and audit costs, and the authentic and fair presentation of corporate financial affairs. In addition, the Narayan Murthy Committee focused on the audit committee`s responsibilities, the quality of financial disclosure and the requirement for directors to assess and disclose business risks in company management reports. Excluding appointed directors from the definition of the independent director: the new clause excludes appointed directors from the definition of independent directors. This is an additional step in avoiding the inherent conflict of interest that allows appointed directors to act as independent directors. Appointed directors have a clear mandate to protect the riding they represent, which are usually the company`s lenders. Therefore, it may not be appropriate for the overall governance of the company to include it in the pool of independent directors.

Therefore, the new clause excludes them within the meaning of the definition of independent directors. In the wake of the Satyam scandal, SEBI has become increasingly stringent in terms of disclosure standards and the implementation of section 49 provisions to change transparency and accountability at sea. The Companies Act provided appropriate legal support for these standards. On the road to transparency and accountability, there are laws on the mandatory rotation of factor controllers and audit firms. A legal auditor cannot provide non-audit services to a company. Auditors are required to report fraudulent acts that have been found in the performance of their duties. In addition, the law requires that at least one-third of a company`s board of directors be made up of independent directors.

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