Mandatory requirements of corporate governance codeCorporate Management

Prepared By

Kindly restrict the use of slides for personal purpose. Please seek permission to reproduce the same in public forms and presentations.

Manu Melwin JoyAssistant Professor

Ilahia School of Management Studies

Kerala, India.Phone – 9744551114

Mail – manu_melwinjoy@yahoo.com

Mandatory requirements of corporate governance code

• Composition of Board of Directors – The board of directors of the company shall have an optimum combination of executive and non executive directors with not less than 50% of the total number of directors comprising of non executive directors

Mandatory requirements of corporate governance code

• Director’s pecuniary relationship – All pecuniary relationship or transactions of the non executive director’s vis-à-vis the company should be disclosed in the Annual Report.

Mandatory requirements of corporate governance code

• Audit Committee – Every company is required to set up a Audit Committee consisting of minimum three members, all being non executive directors, majority of them being independent and at least one member having financial and accounting knowledge. They should meet at least 3 times in an year, once in every six months.

Mandatory requirements of corporate governance code

• Director’s remuneration – The remuneration of non executive directors shall be determined by the board of directors and the following disclosure shall be in the annual report : (a) all elements of remuneration package of all the directors (b) details of fixed and performance related components of remuneration and (c) service contracts, notice period etc.

Mandatory requirements of corporate governance code

• Board meetings – Minimum four board meetings should be conducted in a year. There should not be a time gap of more than four months between any two board meetings.

Mandatory requirements of corporate governance code

• Management – The management of the company must disclose to its Board details relating to all material, financial and commercial transactions.

Mandatory requirements of corporate governance code

• Shareholders – In case of appointment of a director, shareholders should be provided with a brief resume of the person. The company should publish in their website details regarding information on stock exchanges.

Mandatory requirements of corporate governance code

• Report on corporate governance – Every listed company shall have a separate section on corporate governance in the annual report of the company with a detailed compliance report on corporate governance.

Mandatory requirements of corporate governance code

• Certificate of compliance – The company is required to obtain a certificate from the auditors of the company regarding compliance of conditions of corporate governance as stipulated in clause 49 of the listing agreement.