Legal Aspects under Corporate Governance
Various acts and notifications help the company in achieving good corporate governance in their company such as the Companies Act 2013, Securities and Exchange Board of India (SEBI), Standard Listing Agreement of Stock Exchanges, Accounting Standards issued by the ICAI, and Secretarial standards issued by ICSI (Institute of Company Secretaries of India).
- The Companies Act, 2013 provides various provisions that ensures good Corporate Governance in the company. It mandates that every company should have a board of directors, an independent director, a woman director, and do some CSR activities. These provisions are included in the act to ensure that the company is following good corporate governance and that the shareholders of the company do not have to face any issues.
- SEBI act also mandates that the company should file various annual reports to the registrar of the company to have better clarity regarding the daily affairs of the company. SEBI ensures to curb any malpractice in the share market and protects the investor and the company from facing any difficulty.
- The Standard Listing Agreement of Stock Exchanges ensures that the company is following the basic norms that are necessary for them to be listed and it will ensure that the company is following good corporate governance.
Corporate Governance: Principles and Legal Aspect
Corporate Governance consists of two words āCorporateā and āGovernanceā. The general meaning of governance can be understood as the act of the company that is used to cater to the actions and affairs of the company. In short, Corporate Governance is a set of rules that is used to govern the actions of the company. It ensures that the work of the company is running smoothly, the company achieves its objectives, and provides benefits to its shareholders, employees, and workers. It also ensures that in the long run, the company caters to the needs of society with the help of certain activities without hampering their employees.
Geeky Takeaways:
- A good Corporate Governance of a company ensures that the company is reaching various heights and earning profit in business without hampering society or their employees.
- It creates a sense of confidence in investorsā minds and helps the company generate enough capital for their company.
- It also helps the investors, stakeholders, and all the involved companies in the company to get an idea of whether the company is heading and what is the future of the company.
- It encourages the stakeholders of the company to only engage in the best practices for the company.
Table of Content
- What is Corporate Governance?
- Principles of Corporate Governance
- 1. Transparency
- 2. Accountability
- 3. Responsibility
- 4. Risk Management
- 5. Impartiality
- Legal Aspects under Corporate Governance
- Conclusion
- Corporate Governance- FAQs