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  • C.G. Naresh Chandra Committee Report

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    Ashutosh Singh
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    The document outlines 20 recommendations from a High Level Committee on corporate governance for banks in India. Key recommendations include: [1] Strengthening independence standards for auditors; [2] Expanding the roles and responsibilities of boards of directors and independent directors; [3] Establishing new board committees to oversee areas like risk management, audits, and shareholder issues. The recommendations aim to improve transparency, accountability and protect stakeholder interests in line with international best practices.

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    The document outlines 20 recommendations from a High Level Committee on corporate governance for banks in India. Key recommendations include: [1] Strengthening independence standards for auditors; [2] Expanding the roles and responsibilities of boards of directors and independent directors; [3] Establishing new board committees to oversee areas like risk management, audits, and shareholder issues. The recommendations aim to improve transparency, accountability and protect stakeholder interests in line with international best practices.

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    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as ppt, pdf, or txt
    5K views13 pages

    C.G. Naresh Chandra Committee Report

    Uploaded by

    Ashutosh Singh
    The document outlines 20 recommendations from a High Level Committee on corporate governance for banks in India. Key recommendations include: [1] Strengthening independence standards for auditors; [2] Expanding the roles and responsibilities of boards of directors and independent directors; [3] Establishing new board committees to oversee areas like risk management, audits, and shareholder issues. The recommendations aim to improve transparency, accountability and protect stakeholder interests in line with international best practices.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
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    of 13

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    - July 2002 Sarbans- Oxley Bill (SOX) was enacted


    in U.S.
    - DCA appointed a High Level Committee on
    21Aug. 2002 under the chairmanship of Mr.
    Naresh Chandra
    - Term of reference of this committee are wide.
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      !"#$%"&'($')!*&"+(,-(&
    a) Prohibition of any direct financial interest
    b) Prohibition of receiving any loan/guarantee
    c) Prohibition of personal relationships
    d) Prohibition of service or cooling off period
    e) Prohibition of undue dependence on an audit client
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     &'$)'./&-*('("!*&|-)0%-
    a) Accounting and book-keeping services
    b) Internal audit services
    c) Financial information systems design and implementation
    d) Actuarial services
    e) Broker, dealer, investment advisor
    f) Outsourced financial services
    g) Management functions
    h) Any form of staff requirement
    I) Valuation services.
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    —- Independence standards for consulting and other Entitles


    that are affiliated to Audit Firms
    4- No statutory rotation of audit firms but compulsory
    rotation of audit partners (as in SOX Act)
    5- Auditors disclosure of Contingent Liabilities
    6- Auditors disclosure of Qualifications & consequent action
    7- Management certification in the event of Auditor¶s
    replacement
    8- Auditor¶s annual certification of independence
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    ¬- Appointment of Auditors
    10- CEO and CFO certification of annual audited accounts

      
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    11- Setting up of independent Quality Review Board (QRB)


    12- Proposed disciplinary mechanism for Auditors
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         |
    1—- Defining an independent director
    14- Percentage of independent director
    15- Minimum Board size of listed companies
    16- Disclosure of duration of Board/Committee meetings
    17- Tele-conferencing and video conferencing
    18- Additional disclosures to directors
    1¬- Independent directors on Audit committees of listed cos.
    20- Audit committee charter
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    21- Remuneration of independent director


    22- Exempting non executive directors from certain liabilities
    2—- Training of independent directors

    
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    24- SEBI and subordinate legislation
    25- Improving facilities in the DCA offices
    26- Corporate Serious Fraud Office (CSFO)
    27- Changes in Company Law
    
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    28- DCA¶s office


    2¬- Miscellaneous
    - Random scrutiny of audited accounts
    - Internal code of ethics
    - Research on corporate governance
    —0- Audit firms
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        |


    ¬- Need based training programmes/seminars/workshops to
    acquaint the directors with the emerging developments/
    challenges facing the banking sector,
    10- Separate the office of chairman and managing director,
    11- Sufficiently long tenures of whole time directors,
    12- Undertaking from every director for discharging their
    responsibilities to the best of their abilities.
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    1—- Existing level of remuneration is inadequate, should be


    increased and may include stock-options,

    
       |  1232

    14- Prohibition (Sec.20 of BR Act) on lending to


    companies in which a director is interested, should go
    away.
        |

     45
    
    15- Reviews dealing with various performance areas to be put
    up to the Supervisory Committee of the Board and a
    summary of each review to the Board for scrutiny &
    action,
    16- Minutes to be recorded in uniform & formalised manner.

    |  
    17- Qualified Company Secretary to be appointed in all
    banks, and should also have a Compliance Officer
    reporting to the Secretary
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    18- a) Supervisory Committee
    b) Audit Committee
    c) Nomination Committee
    d) Shareholder¶s Redressal Committee
    e) Risk Management Committee
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    1¬- a) Progress made in putting in place a progressive risk
    management system,
    b) Exposure to related entities
    c) Conformity with Corporate Governance standard
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      4    

    20- Banks to evolve a strategy for implementation of the


    recommended standard of Corporate Governance. Reviews
    after 12 months or 6 months as deemed appropriate.

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