New Delhi: The government today said it will
soon introduce a voluntary corporate governance code based on
the recommendations of industry chambers like CII and Ficci
with a view to improving business climate in the country.
The code will be in place for a year after which its
effectiveness would be reviewed, Corporate Affairs Minister
Salman Khurshid said.
This (corporate governance code) is a voluntary code
...We intend to bring a comprehensive corporate governance
code by the end of the year," Khurshid said while releasing a
report on corporate governance by a CII task force.
The report of the task force, headed by former RBI deputy
governor Naresh Chandra, includes recommendations on a variety
of corporate governance issues including the roles and
responsibilities of independent directors, auditors, regulatory
agencies, besides institutional investors and the press.
Although the code would include recommendations from
industry bodies like CII and Ficci, the MCA would design the
code independently. "Initially it would be introduced for
about a year after which we are going to review it," Khurshid
said.
The draft report of the CII task force is posted on the
ministry's website for receiving comments and suggestions
form the general public.
"Inputs are coming in but the ministry has also done a
lot of work on this...The governance code would be on the
website for inviting suggestions. We will try to harmonise the
code with the new Companies Act and other related laws," MCA
Secretary R Bandyopadhyay said.
The MCA is also working in close consultation with the
Securities and Exchange Board to work out ways of reducing
compliance cost borne by firms in meeting the listing norms.
The costs include fee paid to the bourse for getting listed,
expenses for carrying out legal procedures and preparing and
communicating financial results to shareholders.
The CII task force has also suggested a recommendation
committee for fixing the remuneration of company board,
separation of the office of chairman and CEO, certificate of
independence for independent directors, an institution of
mechanism for whistle blowers, not above 10 per cent revenue
coming from a single client of an audit firm.
Besides, the committee has also recommended setting up of
a joint task force comprising the SFIO and the CBI for
investigating frauds of serious nature.
PTI