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Kumar Mangalam Birla Committee - Report
Kumar Mangalam Birla Committee - Report
OBJECTIVES
Corporate Governance has several claimants- share holders and other stakeholders- including suppliers, customers, creditors, bankers, employees, government and society . As the report is for SEBI, investors and shareholders are to form the principal constituents
RECOMMENDATIONS
Are divided into:a) Mandatory b) Non-mandatory MANDATORY 1- Implementation in phases as per schedule 2- Non-executive directors- 50%, some independent 3- Nominee directors- on a selective basis 4- Qualified and independent Audit Committee 5- Audit Committee meetings 3 times in a year
RECOMMENDATIONS
6- Powers of the Audit Committee a) To investigate only activity within its terms of reference b) To seek information from any employee c) To obtain outside legal or professional advice d) To secure attendance of outsiders, if necessary 7- Audit Committee functions as the bridge between the Board and statutory and internal auditors 8- Remuneration committee of the Board should decide the remuneration of non-executive director 9- Disclosure of remuneration package of directors to shareholders
RECOMMENDATIONS
10- Board meetings should be held at least 4 times in a year 11- A director should not be a member in more than 10 committees or acts as chairman of more than 5 committees 12- Accounting standard and financial reporting :a) Consolidation of accounts of subsidiaries, b) Segment reporting where a co.has multiple lines of business c) Disclosure & treatment of related party transactions d) Treatment of deferred taxation 13- Board should clearly define the role of CEO and key managers 14- Board and management must be accountable to shareholders
RECOMMENDATIONS
15- Shareholders right to participate and informed on fundamental corporate changes. Quarterly results to be put up on companys web sites. Postal ballot to be introduced 16- Redressal of shareholders complaints- committee of the Board to be set up under the chairmanship of non-executive directors 17- Board should delegate the powers of share transfer 18- A separate section on C.G. in the annual reports of the companies with a detailed compliance report on C.G. 19- Auditors of the company to give a certificate regarding compliance of the mandatory recommendations and annex the certificate with the directors report.
RECOMMENDATIONS
NON MANDATORY 1- Chairmans role is different from that of the CEO 2- A non-executive chairman entitled to maintain a chairmans office at companys expense 3- Remuneration committee of the Board should consist of three directors 4- Half-yearly declaration of financial performance to be sent to shareholders 5- Institutional shareholders take active interest in the composition of the Board and be vigilant