Regulatory Compliance & Corporate Governance

INTRODUCTION
A countrys growth and progress; its sustainability and consistency solely depend on the systematic approach and practice of good governance. Good Governance can help to create a healthy and effective development of the economy, which in turn will provide equity and benefits to its shareholders. Corporate Governance has evolved and grown significantly as a burning issue in the last decade. Numerous countries have issued codes of Corporate Governance and the recommendations of these codes symbolize Good Governance in the Corporations undoubted contribute towards increased transparency, morality, ethics and disclosure. What is Corporate Governance? Corporate Governance is the set of processes, customs, policies, laws and institutions affecting the way a Corporation is directed or controlled. Corporate Governance is important for the economic health of Corporations and the Society in general. The key elements of Corporate Governance principles include honesty, ethics, transparency, integrity, openness, responsibility, accountability, mutual respect and commitment to the Organisation. The Integrity of corporations, financial institutions and markets is particularly central to the health of economies & their stability. Corporate Governance refers to the processes, mechanism, principles and structure by which the business & affairs of the company are directed, managed and governed effectively. The ultimate goal is to enhance long term shareholder value by improving corporate governance and accountability. The issues of fiduciary duty and accountability are often discussed within the framework of Corporate Governance. It allows a more constructive and flexible response to raise standards in running and managing a company as opposed to strict statutory requirements.

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J. Wolfensohn, the then president of the World Bank has opined that corporate governance is about promoting corporate fairness, transparency and accountability.2 The Corporate Governance

structure specifies the relations and the distribution of rights and responsibilities among primarily three groups of participants i.e. The Board of Directors Managers & Shareholders
Shareholders Board of Directors

Managers

The system spells out the rules & procedures for making decisions on Corporate Affairs, provides the structure through which the company objectives are set, as well as the means of attaining and monitoring the performance of those objectives. Corporate Governance helps in ensuring conditions whereby the Organisations Directors and Managers act in the larger interests of the Organisation and its shareholders and to ensure the means by which managers are held accountable to capital providers for use of assets.

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