This post has been drafted on a special request of one of the students here in the group.
It is about third chapter of Ethics paper. The conceptual about Corporate Governance.
Just to quote an example every relation works for a longest period or may be for life only if it has few important ingredients in it like personal touch, nurturing, truth, fairness, transparent, responsibilty.
Corporate Governance means running/ governing a corporate(company). Now you being a shareholder has invested your hard earned money into it and you will surely have high expectations from the one who are the governor(directors).
Can you individually control them?
No. You need law to do it for you. For which the law intervene between a shareholder and governor or Board of directors or Company.
This chapter starts with the definition and the important ingredients or the pillars it stands on they are being Fair, accountable for the resources the company has acquired, being responsible, and be open or transparent.. if any one of them is moved the building of good corporate governance or reputation from a long period falls.
Law has defined some important suggestions, some mandatory procedure to keep the pillars right up standing and to compel the board to be responsible fair transparent and accountable like the no. Of executive and non executive directors in the board should be according to act or clauses of Sebi...
Further more the independent directors better it would be because they will never be biased since they have no relation with the company other than the remuneration.
So these procedures are mandatory to be followed to keep a close check on the board to ensure that they are working for STAKEHOLDERS and not for their personal benefits.
Under this chapter you are supposed to learn a definition of corporate governance may be given by Narayana Murthi committee or by ICSI.
The pillars of corporate governance. Every thing related to companies act 13, recommendation by Narayana committee, importance of Corporate Governance , the history about how the same logic of Corporate Governance was used in past..
If there are some specific topic that you are facing problem in, do let us know.