CORPORATE

GOVERNANCE

1
REFERENCES-

• STUDY – MATERIAL
• CORPORATE- GOVERNANCE= BY
DR.S.SINGH
• INTERNET
[http://en.wikipedia.org/wiki/corporate_govr.]

2
Contents-
• 1.DEFINITION.
• 2.HISTORY.
• 3.PRINCIPLES.
• 4.CORPORATE GOVERNANCE AT ORACLE
CORPORATION.
• 5.INTERNAL AND EXTERNAL CORPORATE
GOVERNANCE CONTROLS.
• 6.SYSTEMIC PROBLEMS OF CORPORATE
GOVERNANCE.
• 7.CORPORATE MODELS.
3
DEFINITION-
• “Corporate governance is the set of processes,
customs, policies and laws affecting the way in
which a corporation is directed, administered or
controlled” (http:\en.wikipedia.org\wiki\corporategovernance)
• It also includes the relationship among the
stakeholders and the goals for which the
corporation is governed.
• The corporate governance structure specifies the
rules and procedure for making decision on
corporate affairs.
• it also provide the structure through which the
company objectives are set.
• It is used to monitor whether outcomes are in
accordance with plans or not. [STUDY-MATERIAL]
4
HISTORY-
• In 19th century the need for a better corporate governance
was felt when-
• Few giant corporation in u.s. collapsed
– e.g. ENRON, WORLD COM, ADELPHIA.
– Few companies of U.K. also witnessed several cases of
corporate corruption and collapse.
 It led to setting of CADBURY(1996), GREEBURY and
HAMPEL(1997) committee. [INTERNET]
 INDIAN- SCENARIO [P.NO. 183-DR.S.SINGH]
 Initial thrust for better corporate governance came in
INDIA mainly due to-
 Due to 1992 stock market scam .
 Onset of international competition resulting from the
policy of liberalisation of economy in 1991

5
• The confederation of INDIAN industries was the first
to appoint a committee under chairmanship of
Mr.rahul bajaj in 1998.
• It was followed by4 national level committee
• Kumar mangalam birla committee in 1999.
• N.R. Narayana murty committeein 2003
• Gangully committee report in 2002.
• 4th committee appointed by govt. of INDIA known
as report of naresh chandra.

6
PRINCIPLES-
• Key elements of good corporate governance
principles include honesty, trust and
integrity, openness, responsibility and
accountability,mutual respect to the
organisation
• Commonly accepted principles of corporate
governance includes-

• TRANSPARENCY BOARD-
effectiveness
• SHAREHOLDERS right
•
• [P.NO.180- DR.S.SINGH]
7
• Transparency-
-disclosure of data.
-disclosure of transaction.
 Shareholders right
-right and equitable treatment of shareholders.
-right to vote.
 Board effectiveness
• Role and effectiveness of board.

8
CORPORATE GOVERNANCE AT ORACLE
CORPRATION
• As part of these practices, the board has adopted
following corporate governance guidelines which
align the interest of directors and management
with those of oracle corporation stockholders-
• The board of oracle corporation has through out
its history developed corporate governance
practices to fulfill its responsibility towards oracle
corporation stockholders.
Oracle corporation CORPORATE GOVERNANCE
guidelines –
1.directors qualification. 6.performance-
evaluation.
2 Directors responsibility.
3.Board committees.
4.Director access to officers and employees.
5.CEO evaluation.
Board with the help of nomination and governance 9
committee can review these guidelines
Internal and external corporate
governance controls-
• Internal corporate governance controls-
-internal corporate governance controls monitor
activities and take corrective action to accomplish
organisational goals.examples includes-
#Monitoring by board of directors-
#remuneration-
#disclosure-the annual report should contain the
following-
-name of chairman, deputy chairman, CEO & non
executive directors.
-the audit and remuneration committee members.
-the no. of meeting held by the board &no. of
directors attend.
-how board and committee performation evaluaton 10
 External corporate governance
controls-
#govt. regulations.
#media pressure.
#takeovers.
#competition.
[INTERNET]

11
 SYSTEMIC PROBLEMS OF
CORPORATE GOVERNANCE
#SUPPLY OF ACCOUNTING
INFORMATION.
#DEMAND FOR INFORMATION.
#MONITORING COSTS.
[INTERNET]

12
CORPORATE MODELS
• Generally only two types of corporate models are discussed-
1.Anglo American model-
2.Non Anglo American model-
[INTERNET]
-e.g. Reliance industries ltd. % holding
1.1 promoters holding 46.68
1.2 institutional investors 28.35
1.3 Indian public 16.56
1.4 others (NRI,OCB,DGDR) 8.40
e.g. WIPRO
1.1 pr0moters 83.95
1.2 institutional investors 3.77
1.3 INDIAN public 7.03
1.4 others (NRI,OCB,DGDR) 5.25
[P.NO. 85 DR.S. SINGH] 13
•Thank- you

14