Professional Documents
Culture Documents
A PROJECT REPORT ON
CORPORATE GOVERNANCE IN TATA
SUBMITTED TO:
UNIVERSITY OF MUMBAI
ACADEMIC YEAR
(2015-16)
SUBMITTED BY:
PAYAL AMBHORE
ROLL NO: 17
M.COM PART-I (BUSINESS MANAGEMENT)
(SEMESTER 2)
PROJECT GUIDE:
PROF S.N.CHITALE
VPMS
K.G. JOSHI COLLEGE OF ARTS &
N.G. BEDEKAR COLLEGE OF COMMERCE
(THANE)
CERTIFICATE
OF
PROJECT WORK
This is certify that
Mr. / Ms.
_______________________________________________ Of
PROJECT GUIDE
EXTERNAL EXAMINER
DECLARATION
done
project
GOVERNANCE IN TATA
on
reference
to
CORPORATE
Student
(PAYAL AMBHORE )
Place: Thane
Date:
ACKNOWLEDGEMENT
It gives me great pleasure to declare that my project on CORPORATE GOVERNANCE
IN TATA have been prepared purely from the point of view of students requirements.
This project covers all the information pertaining to CORPORATE GOVERNANCE IN
TATA. I had tried my best to write project in simple and lucid manner. I have tried to avoid
unnecessary discussions and details. At the same time it provides all the necessary information.
I feel that it would be of immense help to the students as well as all others referring in updating
their knowledge.
I am indebted to our principal Dr. Mrs. Shakuntala A. Singh Madam for giving us such an
awesome opportunity. I am also thankful to our coordinator Mr. D.M. Murdeshwar Sir and also
librarian and my colleagues for their valuable support, co-operation and encouragement in
completing my project.
Special thanks to Prof. S.N.CHITALE my internal guide for this project for giving me
expert guidance, full support and encouragement in completing my project successfully.
I take this opportunity to thanks my parents for giving guidance and for their patience and
understanding me while I am busy with my project work.
Lastly I am thankful to God for giving me strength, spirit and also his blessings for
completing my project successfully.
INDEX
SR
NO
.
CONTENTS
1.
INTRODUCTION
2.
PRINCIPLES
3.
6.
ADVANTAGES
DISADVANTAGES
WHAT
IS
GOVERNANCE
IN
MANAGEMENT
CORPORATE
RESPONSIBILITY
COMPANY PROFILE
7.
8.
COMPANYS PHILOSOPHY
4.
5.
PAG
E
NO.
AND
1
0
CORPORATE
STRATEGIC
1
3
SOCIAL
1
4
1
6
2
0
2
3
9.
2
7
10.
11.
3
4
4
2
12.
CONCLUSION
44
13.
BIBLIOGRAPHY
46
INTRODUCTION
CORPORATE GOVERNANCE
The system of rules, practices and processes by which a company is directed and
controlled. Corporate governance essentially involves balancing the interests of the
many stakeholders in a company - these include its shareholders, management,
customers, suppliers, financiers, government and the community. Since corporate
governance also provides the framework for attaining a company's objectives, it
encompasses practically every sphere of management, from action plans and
internal controls to performance measurement and corporate disclosure.
Corporate social responsibility is the fastest-growing area of corporate governance.
CSR is also sometimes called corporate conscience or sustainable business, as it
functions as a self-check for the business' social performance.
Corporate governance broadly refers to the mechanisms, processes and relations by
which corporations are controlled and directed. Governance structures identify the
distribution of rights and responsibilities among different participants in the
corporation (such as the board of directors, managers, shareholders, creditors,
auditors, regulators, and other stakeholders) and includes the rules and procedures
for making decisions in corporate affairs. Corporate governance includes the
processes through which corporations' objectives are set and pursued in the context
of the social, regulatory and market environment. Governance mechanisms include
monitoring the actions, policies and decisions of corporations and their agents.
Corporate governance practices are affected by attempts to align the interests of
stakeholders
Definition:Corporate governance has also been defined as "a system of law and sound
approaches by which corporations are directed and controlled focusing on the
internal and external corporate structures with the intention of monitoring the
actions of management and directors and thereby, mitigating agency risks which
may stem from the misdeeds of corporate officers."
Strategy: In order to work well, a corporate strategy needs to the reviewed,
challenged, changed and updated regularly. Thats not just annual business
planning and budgeting. Corporate governance broadly refers to the mechanisms,
processes and relations by which corporations are controlled and directed.
Governance structures identify
Ethical behavior violations in favor of higher profits can cause massive civil
and legal problems down the road. Underpaying and abusing outsourced
employees or skirting around lax environmental regulations can come back
and bite the company hard if ignored. A code of conduct regarding ethical
decisions should be established for all members of the board.
Business transparency is the key to promoting shareholder trust. Financial
records, earnings reports and forward guidance should all be clearly stated
without exaggeration or creative accounting. Falsified financial records
can cause your company to become a Ponzi scheme, and will be dealt with
accordingly.
10
DISADVANTAGES:
Corporate governance is one of the law's most intensely regulated fields. This is
because corporations are privately owned but are treated as independent legal
entities, rendering their assets vulnerable to a variety of potential abuses. Corporate
governance is generally governed by state law, although the federal government
has also enacted legislation to curb abuses.
Ownership-Management Separation
The officers and directors who run the day-to-day affairs of a corporation and
make most of its policy decisions are not necessarily shareholders. This can
become a problem in large, publicly traded corporations. If no shareholder holds a
controlling interest in the corporation, and most shareholders vote by proxy, the
corporation's assets are controlled by the board of directors and the officers. The
separation of ownership and management can lead to a conflict of interest between
management's duty to maximize shareholder value and its interest in maximizing
11
its own income. A CEO, for example, might be paid a large bonus even as the
corporation approaches bankruptcy.
12
The abuse of corporate governance has triggered the enactment of a large body of
state and federal laws designed to prevent such abuses from recurring. Compliance
with these laws can be burdensome and expensive for corporations. For example,
the Securities and Exchange Act of 1933 requires companies seeking to list on
a stock exchange to make such extensive disclosures to potential investors that
compliance can cost hundreds of thousands of dollars. More recently, the SarbanesOxley Act of 2002 requires corporations to establish extensive systems of internal
controls to ensure that their financial statements are both factually accurate and
non-misleading.
13
14
community -- all of those people who fall outside the internal workings of your
business. Strategically managing your relationships with external stakeholders is
essential because these people place high value on a business' ability to offer high
quality and fairly priced products and services. The old adage to "keep your
customers happy and they'll keep coming back" is a wise approach to managing
stakeholder expectations.
Internal Stakeholders
On the flip side, a business' corporate governance structure must also incorporate a
focus on its internal stakeholders. These are the individuals within the business that
have a direct impact on its daily operations, such as employees, the Board of
Directors and the management. Building strategic relationships with these people is
important for ensuring the long-term success of the business including its
profitability. The key is to keep your internal stakeholders informed and motivated;
they should want the business to be the best it can be and they should always have
the external stakeholders' interests in mind
15
impact on the environmental, social and community issues that affect both your
internal and external stakeholders
Strategy & Corporate Governance
To maintain corporate stability, you need a robust structure with the correct checks,
balances, accountability and transparency.
Our experienced team who have all held the top positions in large organisations
can help you achieve that through an in-depth governance review and health check.
We can review and test existing structures and procedures and we can help ensure
all board committee members or trustees are clear about their roles.
That includes their role in defining and setting strategy, monitoring performance,
ensuring compliance with the law and being challenging yet supportive of the
executive management and staff.
Strategy
In order to work well, a corporate strategy needs to the reviewed, challenged,
changed and updated regularly. Thats not just annual business planning and
budgeting.
Corporate governance broadly refers to the mechanisms, processes and relations by
which corporations are controlled and directed. Governance structures identify the
distribution of rights and responsibilities among different participants in the
corporation (such as the board of directors, managers, shareholders, creditors,
auditors, regulators, and other stakeholders) and includes the rules and procedures
for making decisions in corporate affairs.
16
COMPANY PROFILE
Tata Group is an Indian Multinational conglomerate company headquartered
in Mumbai,
Maharashtra,
India. It
encompasses
seven
business
sectors:
17
energy, consumer products and chemicals. Tata Group was founded in 1868
by Jamsetji Tata as a trading company. It has operations in more than 80 countries
across six continents. Tata Group has over 100 operating companies with each of
them operating independently. Out of them 32 are publicly listed. The major Tata
companies are Tata Steel, Tata Motors, Tata Consultancy Services (TCS), Tata
Power, Tata
Chemicals, Tata
Industries, Tata
Global
Beverages, Tata
Hotels. The
Teleservices, Titan
combined
market
capitalization of all the 32 listed Tata companies was INR 8.4 Trillion ($141.27
billion) as of July 2014.Tata receives more than 58% of its revenue from outside
India.
global
brand
within
and
outside
the
country
as
per
18
was awarded the Carnegie Medal of Philanthropy in 2007 in recognition of its long
history of philanthropic activities.
The international brand consultancy Brand Finance has ranked the over $100billion conglomerate, Tata Group, as 39th most valuable brand in the world. The
most recent Global 500 report by Brand Finance shows that despite the
controversies, Tata Group's brand value has soared to $15.08 billion for the current
year compared to $11.2 billion last year in 2010.
In 2009 the Tata Group was ranked 11 in the world's top 100 reputable companies
by Forbes Magazine
In 2011 and 2012, Tata was ranked as India's second most trusted brand by The
Brand Trust Report In 2013, The Brand Trust Report, ranked Tata as India's fifth
most trusted brand. In 2014 Tata was ranked third Most Trusted Brand by the same
report.
In a 2011 investor poll conducted by equity research firm Equity master, TATA
Group was voted as the most trustworthy among the Indian corporate houses. Over
61% of the respondents "showed their confidence in the Tata Group". The Tata
Group retained its "Most Trustworthy" status in the 2012 edition of the poll. In
2000, its Dewas division was awarded the Rajiv Gandhi National Quality Award.[
Subsidiaries and Joint Ventures
TILs largest subsidiary, Tata Africa Holdings has served as the flag bearer of the
Tata Group in the continent since 1977 and is headquartered in South Africa. It has
facilitated several business collaborations and has successfully created a niche for
the Tata brand, its values and commitment to the larger community.
19
Through subsidiaries and joint ventures worldwide, we also have business interests
in luxury hotels, bus body building, logistics, vehicle assembly and trailer
manufacturing facilities.
Corporate Sustainability
At TIL, we are deeply committed to being a proactive and responsible member of
the community and the environment in which we are present. Stringent goals for
the reduction of carbon footprint and greenhouse gases in our leather plant and
other facilities, coupled with initiatives for empowering local communities in equal
measure, drive our long-term sustainability agenda. Winner of several prestigious
national awards and international certifications for environment and quality, TIL is
also a signatory to the UN Global Compact.
ethically.
multinational
20
Tata operates best in the products it delivers and best in its value system and
ethics.'' Tata Motors surpassed Reliance to win the coveted title of 'India's most
valuable brand' in an annual survey conducted by Brand
Economic Times in 2010. Tata Motors was ranked as India's 3rdMost Reputed Car
manufacturer in the Reputation Benchmark Study - Auto (Cars) Sector, launched
in2012.
The company was ranked 359th globally in Fortune Global 500list in 2011.
Transparency: To maintain the highest standards of transparency in all aspects of
our interactions and dealings.
Compliances: To comply with all the laws and regulations applicable to the
company.
Ethical conduct: To conduct the affairs of the company in an ethical manner.
21
Environmental Performance
Tata Motors has taken measures to reduce its packaging footprint by either using
sustainable packaging (replacing wood with metal) or reusing existing packaging
(recycling wood). It recycles close to 69% of the wood packaging thus eliminating
use of fresh wood.
Tata Motors is heavily investing in the research and development in order to
develop low Carbon, fuels saving technologies which will help reduce greenhouse
gas emissions.
The company has been actively partnering with NGOs on regional resource agency
basis in order to organize programs for creating environmental awareness followed
by field action at the local , regional and national level.
22
Social Performance
Tata Motors being a socially conscious company develops programs for the benefit
of the communities. Their contributions have been in the fields of health, education
and employability across the societies.
Health:
Healthcare provided to nearly 300,000 people annually.
Over 300 low cost toilets built per annum.
Sanitation drives conducted with participation of over 40,000 villagers in over
50 villages. Amritdhura Project implemented to provide safe drinking water to
100 villages in next three years.
Smoke efficient chullahs installed in over 200 village households to curb
respiratory problems. 5,000 women treated in anemia treatment camps. Education
Infrastructure and facility up-gradation benefitting 50,000 students annually.
Teachers training for more than 2,000 primary school teachers.
Extra-curricular
23
Over 1,500 women benefited through SHGs and over 150 SHGs formed and
sustained
Awards and Accolades
Tata Motors has received Golden Peacock Award for excellence in Corporate
Governance for the year 2011.
The Company, in 2011 won the Srishti G-Cube Awards for Good Green
Governance in Manufacturing - Engineering category, CVBU Pune was the
winner, Jamshedpur Plant was declared ''runner up'', and Pantnagar Plant received a
''certificate of commendation''
Tata Motors won Sword of Honour for Pant Nagar Plant which is reflection of high
standards of health and safety, performance and demonstration of safety leadership,
in all phases of operations of the plant.
Tata Motors won the Greentech Environment Silver Award for outstanding
achievement in Environment Managemen
24
25
Indian Stock Exchanges and the applicable regulations and guidelines issued by
Securities and Exchange Board of India.
BOARD OF DIRECTORS
The Board of Directors along with its Committees provides leadership and
guidance to the Company's management and directs, supervises and controls the
performance of the Company. The Board currently comprises of twelve Directors
out of which nine Directors (75%) are Non Executive Directors. The Company has
a Non Executive Chairman and the six Independent Directors comprise at least one
half of the total strength of the Board. All the Independent Directors have
confirmed that they meet the 'independence' criteria as mentioned under Clause 49
of the Listing Agreement.
None of the Directors on the Company's Board is a Member of more than ten
Committees and Chairman of more than five Committees(Committees being, Audit
Committee and Investors' Grievance Committee) across all the Indian Public
limited companies in which he is a Director. All the Directors have made necessary
disclosures regarding Committee positions held by them in other companies and do
not hold the office of Director in more than fifteen public companies. None of the
Directors of the Company are related to each other. All Non Executive Directors,
excluding the 'Steel Director' (Tata Steel representative), are liable to retire by
rotation. The appointment of the Managing Director and Executive Directors
including the tenure and terms of remuneration are also approved by the members
at the first meeting after their appointment.
26
27
and
28
The fountainhead of the corporate governance of the Tata Power Company is the
Tata Code of Conduct. The Company is committed to abide by it, in its letter and
spirit. And the Company has earned the Tata Brand name by virtue of this
commitment. It draws its strength from the five Tata values:
Integrity
Understanding
Excellence
Unity
Responsibility
In Tata parlance they stand for
Integrity
We must conduct Your business fairly, with honesty and transparency. Everything
we do must stand the test of public scrutiny.
Understanding
We must be caring, showing respect, compassion and humanity for Your colleagues
and customers around the world, and always working for the benefit of India.
Excellence
We must constantly strive to achieve the highest possible standards in Your day-today work and in the quality of the goods and services we provide.
29
Unity
We must work cohesively with Your colleagues across the group and with Your
customers and partners around the world, building strong relationships, based on
tolerance, understanding and mutual cooperation.
Responsibility
We must continue to be responsible, sensitive to the countries, communities and
environments in which we work, always ensuring that what comes from the people
goes back to the people many times over.
The name of TATA says it all. It encompasses the lowest common Tata
denominator the way others see the Tata Group.
Trust
Acceptability
Transparency
Accountability
Management Practices
For consistency and faithful implementation of the corporate objectives of Tata
Power, the Board has followed certain management practices even prior to the
same being made mandatory, viz., Constitution of an Audit Committee,
Remuneration Committee, etc.
30
31
significance.
understanding,
excellence,
unity
and
responsibility.
32
conduct
with
the
requirements
of
the
TCoC.
33
but
also
remain
profitable
enterprises.
34
conducted a pilot study on two group companies in 2003 on the basis of criteria
specifically designed to assess the corporate governance related processes. To
make the process more meaningful and comprehensive, the team set up for the task
examined not only the Malcolm Baldrige criteria, but also various other
models/methodologies for assessment on compliance to corporate governance. Post
the pilot assessment, the Steering Committee, which was set up specifically for the
purpose, deliberated the findings and assessment methodology in detail. In 2005,
Tata Quality decided to conduct corporate government assessment for more group
companies according to the modified criteria, which included changes made so far
in the Malcolm Baldrige criteria.
WHY TATA QUALITY FOCUSES ON CORPORATE GOVERNANCE
According to a World Bank report, "A company remains a key component of
modern society. In fact, in many respects, companies have become a more
immediate presence to many citizens and modern democracies than either the
Government or other organs of society". Proper governance of companies is as
crucial for sustained public trust (investors, customers, suppliers, partners,
employees, regulators, community, etc.) and wealth generation as is proper
governance of countries for socio economic development.
Corporate governance is increasingly being seen not just as a mechanism to ensure
accountability (where one is liable to render an account) but also as a mechanism
to demonstrate responsibility (where one is liable to be called to account). Where
formerly Boards sought only a "legal" license to operate, today Boards also
demand a 'social license' to operate.
35
The emphasis today is on balancing the need for performance (short run)
and conformance (to the expectations of various other stakeholder groups). This
can be achieved only through adoption of an inclusive approach where relevant
stakeholder groups are identified and engaged on a continual basis. The current
governance paradigm, where transparency is inversely proportional to trust, is
untenable simply because infinite transparency does not guarantee high trust. There
is thus a need for a paradigm shift and graduation to a new paradigm, wherein trust
is built through a process of stakeholder engagement (being aware of, sensitive and
responsive to stakeholder concerns) or involvement. This is a paradigm that has a
direct relationship between public trust and engagement, where higher is the level
of engagement, more is the public trust.
In the changed paradigm, good governance encompasses not just Board Practices
but also a clear demonstration of commitment to social responsibility, business
ethics and balancing value for all stakeholders.
Corporate governance is considered an important instrument of investor protection,
and it is therefore a priority on SEBI's agenda. SEBI has been constantly working
towards improving the level of corporate governance in the country and in view of
the stage of development of the capital market, SEBI considers it imperative that
the adoption of globally acceptable practices of corporate governance be
accelerated in India. This would ensure that Indian investors are in no way less
informed and protected as compared to their counterparts in the best-developed
capital markets and economies of the world.
These events have highlighted the need for ethical governance and management,
and the need to look beyond mere systems and procedures. This will ensure
compliance with corporate governance codes, in substance and not merely in form.
36
Honesty, as the British writer John Ruskin noted, can never be based on policy.
Corporate houses cannot mandate ethical business behaviour any more than the
weather bureau can summon rain or shine. But they can ingrain it in the character
of the organisation through tradition, value systems and a commitment to the
letter as much as the spirit of laws and regulations. This is what the Tatas have
endeavoured to do in the 100-plus years of their existence.
Corporate governance as practised by Tata enterprises translates into being fair and
civic-minded, fulfilling their duties to the entire spectrum of stakeholders, and,
most importantly, making integrity an article of faith across all operations. There is
nothing serendipitous about how this has come to be.
The Tata adherence to ethical business conduct is rooted in the vision of its
founder, Jamsetji Tata, for whom the end of entrepreneurial triumph was always
secondary to the means by which it was achieved. We do not claim to be more
unselfish, more generous or more philanthropic than other people, he wrote at the
turn of the 20th century, but we think we started on sound and straightforward
business principles, considering the interests of the shareholders our own, and the
health and welfare of the employees the sure foundation of our success.
37
That foundation was built on a collection of values that have since become implicit
in the functioning of Tata companies. Complementing the unwritten rules
underpinning the Tata way of doing business is a growing catalogue of explicit
policies, the most notable among these being the Tata code of
conduct, a comprehensive template of ethical behaviour that guides
the actions and decisions of Tata employees. Crucial as the explicit is, it is the
implicit that truly defines, and constantly reinforces, the Tata edifice. Values and
beliefs are more vital in this context than structures and systems.
Tata Sons Chairman Ratan Tatas views on the issue are illuminating. Speaking in
an interview, he said: Business, as I have seen it, places one great demand on you:
it needs you to impose a framework of ethics, values, fairness and objectivity on
yourself at all times. It is easy not to do this; you cannot impose it on yourself
forcibly because it has to become an integral part of you. What has to go through
your mind at the time of every decision, or most decisions, is: does this stand the
test of public scrutiny? As you think the decision through, you have to
automatically feel that this is wrong, incorrect, or unfair
The leadership with trust philosophy that has come to play such a vital role in
how the world perceives Tata companies is all the more remarkable given the
climate of unparalleled public distrust of people in positions of authority, whether
in business or politics. Protecting this trust from the fallibilities of individuals and
institutions is, for Tata enterprises, an obligation rather than a burden. From here
stems the Tata conviction that, while openness, transparency and accountability, the
pious sentinels of corporate governance, are crucial, they cannot override what
actually occupies the heart of good governance: credibility, trust and integrity.
Making honesty your strongest business ally is no trifling task. The culture of
fraudulence that pervades our times means that no one can be assumed to be
38
39
woman said, to enjoy the rainbow you have to put up with the rain. The Tata ethics
council comes into the picture only when a company, or board, refers a case. We
dont make a brouhaha about complaints, says Mr Irani. Most often, cases are of
a small financial matter. If somebody is found guilty in such matters, he or she is
asked to resign. The prime concern is making sure nobody suffers.
The ethics code in Tata companies covers much more than financial dealings.
There is the question of customers, of suppliers and vendors, of quality in products
and services, and of satisfying shareholders. A whole lot of these heads come under
the umbrella of the Tata Business Excellence Model, a framework that helps Tata
companies achieve their business objectives through specific processes. The
recently initiated effort to reduce the greenhouse gas emissions of its top five
companies and bring them on par with global benchmarks highlights another
aspect of the Tata commitment being conscientious about the threat posed by
climate change and environmental degradation.
Many Tata companies have also adopted guidelines laid down by the
Global Reporting Initiative (GRI), an independent body that is part of the United
Nations. GRI has what is known as the triple bottom line (TBL) approach:
financial, social and environmental. Companies following its guidelines have to
report their performance on these three parameters. We have a person designated
to help Tata companies prepare these TBL reports, says Mr Irani, himself a
member of the initiative. GRI has rules and methodologies for nearly everything
under the business sun, but Mr Irani, for one, still prefers the Tata way of managing
by example and precedent. Good corporate governance is a matter of
conforming to accepted practice, he says.
One area in which there has been a significant change from accepted practice is in
the attitude to shareholders. A constituency once taken almost for granted now has
40
been accorded criticality. Similar is the status afforded to customers and, in a wider
context, to quality.
According to the Tata lexicon, good governance has to stretch way beyond staying
on the right side of the law and it has to come from faith rather than force. Yes,
we have a code of conduct, but ethical behaviour cannot be enforced by diktats and
through written documents, says Kishor Chaukar, managing director of Tata
Industries. You have the Bible, the Bhagwad Gita, the Koran; they all tell you
how to behave. Doesnt help. The penal code is clear about what constitutes
criminal behaviour, but that hasnt stopped the burglaries, the rapes and the
murders.
An ingrained sense of ethical business conduct has been the cornerstone of the Tata
way of corporate governance. Rules and regulations certainly have a place in this
scheme, but they supplement rather than supplant the traditional values on which
Tata companies have been shaped. The stories in this section about ethics,
business excellence, safety and financial propriety show how good governance
has taken root in Tata organisations. Theres nothing amorphous about that.
Long before corporate governance became a buzzword in industry circles, Tata
Steel was following the letter and spirit of the rules that define ethical business
behaviour
Companies learned long back that having the complete cooperation and
participation of their employees meant improved efficiencies and, consequently,
superior products. Now they have begun understanding that a strong commitment
from investors and other stakeholders can lead to similar payoffs for the
organisation. Both are elements of a corporate governance template which
demands that broad-based systems of accountability be built into the spinal
41
42
43
working day, leave with pay, provident fund, gratuity and profit sharing.
The rules implicit in Tata Steel's proactive workday ethos have been around for
many years. The company never meddles in the share market. It invites a social
audit every 10 years, in which an independent authority checks if it has functioned
responsibly and ethically with all its stakeholders. Tata Steel recently adopted the
Social Accountability (SA) 8000 standard, which promotes responsible behaviour
towards labour supplied by its contractors. It has also set up apex committees for
management, business excellence, safety, research and development, information
technology, etc.
To ensure that a culture of self-motivated ethics percolates to the rank and file, Tata
Steel lays plenty of emphasis on communication, the third layer of its corporate
governance structure. The office of the ethics counsellor executes this vision. Says
ethics counsellor Rekha Seal, "We manage with trust. We start with the given that
everyone is honest, but if we find that someone has flouted rules we take decisive
and immediate action. This is important because trust is the foundation of our name
and our brand."
44
CONCLUSION
Corporate governance philosophies differ around the world. However, with a few
relatively minor exceptions, there exists a broad consensus on the elements of good
corporate governance. It is widely understood that the most effective aspects of
good corporate governance include:
a strong board of directors, independent of management and with sufficient
expertise to oversee corporate management on behalf of the companys
shareholders;
management compensation oversight, such as a compensation committee
comprised of independent directors, to prevent opportunistic behaviour by
management and help link management compensation to corporate performance;
strong corporation laws and regulations designed to protect the rights of
shareholders;
extensive public disclosure requirements, including both financial and nonfinancial reporting designed to give shareholders and potential investors an
accurate, timely and thorough picture of the companys performance and liabilities;
and
a robust independent audit function, with sufficiently thorough procedures to
confirm the accuracy of a public companys financial disclosure statements and
45
46
BIBLIOGRAPHY
http://www.tataquality.com/APageNew.aspx?
sn=1&pid=ghlUTq0f5DoqGu+gCazwVUd/CTupcvRT§ionid=ghlU
Tq0f5Donzk5+Kua+jwilVm4xS3LG
http://www.tata.com/article/inside/chIRd2UhyQc=/TLYVr3YPkMU=
www.google.com