Managing Diverse Markets: Corporate Governance in India and Germany

Managing Diverse Markets
Presented by: Parth, Dinesh, Sahil, Rahul and Mehak
Group Work:
Complexity & Risks in Global Supply Chains
CORPORATE GOVERNANACE IN INDIA

The initiatives taken by Government in 1991.
Aimed at economic liberalization and Globalisation of the domestic
economy.
Securities and Exchange Board of India (SEBI) constituted
Committees to recommend initiatives in Corporate Governance.
In 1998 ,Confederation of Indian Industry (CII)- Desirable Corporate
Governance was formed.
In 2000, SEBI accepted the recommendations of Kumar Mangalam
Birla Committee and introduced CLAUSE 49
Group Work:
http://www.icsi.in/Study%20Material%20Professional/GBES.pdf
CLAUSE 49: MAIN PROVISIONS

Board of directors
Audit committee
Remuneration of directors
Board procedure
Management
shareholders
Report on corporate governance
Compliance certification
Group Work:
3
CORPORATE GOVERNANACE IN INDIA
Group Work:
BOARD OF DIRECTORS (BOD)
Group Work:
5
TYPES OF BOARDS
1. Unitary Board:
A Company is Governed by one Corporate body that undertakes
both the management and monitoring functions.
2. Two-Tier Board:
A two-tier board fulfils the same basic functions as a unitary board,
but it does so through a clear separation between the tasks of
monitoring and that of management. The supervisory board
oversees the direction of the business and the management board is
responsible for the running of the company
Group Work:
6
COMPOSITION OF BOARD
Group Work:
7
MANAGEMENT
The management comprises the Chief Executive, Executivedirectors and the key managers of the company, involved in day-today activities of the company.
Over-riding aim of management is to maximize shareholder value
without being detrimental to the interests of other stakeholders.
Management is subservient to the board of directors and must
operate within the boundaries and the policy framework laid down by
the board.
Group Work:
http://www.sebi.gov.in/commreport/corpgov.html
FUNCTIONS OF MANAGEMENT
Assisting the board in its decision making process in respect of the
companys strategy, policies, code of conduct and performance
targets, by providing necessary inputs.
Implementing the policies and code of conduct of the board.
Managing the day to day affairs of the company to best achieve the
targets and goals set by the board, to maximize the shareholder
value.
Providing timely, accurate, substantive and material information,
including financial matters and exceptions, to the board, boardcommittees and the shareholders.
Group Work:
FUNCTIONS OF MANAGEMENT
Ensuring compliance of all regulations and laws.
Ensuring timely and efficient service to the shareholders and to
protect shareholders rights and interests.
Setting up and implementing an effective internal control systems,
commensurate with the business requirements.
Implementing and comply with the Code of Conduct as laid down by
the board.
Co-operating and facilitating efficient working of board committees.
Group Work:
http://www.sebi.gov.in/commreport/corpgov.html 10
SHAREHOLDERS- Owners of the company

Responsibilities of Shareholders
General Body Meetings provide an opportunity to the shareholders

to address their concerns to the board of directors and comment on
and demand any explanation on the annual report or on the overall
functioning of the company.
The shareholders must therefore show a greater degree of interest
and involvement in the appointment of the directors and the auditors.
Group Work:
11
SHAREHOLDERS- Owners of the company

Rights of shareholders:
Right to obtain copy of MOA and AOA.

Right to transfer and registration of shares, obtaining relevant
information on the company on a timely and regular basis.
Right to Participate and Vote in shareholders meeting.
Right to elect members of the board and sharing in the residual
profits of the company.
Right to participate in, and be sufficiently informed on decisions
concerning fundamental corporate changes.
Group Work:
12
SHAREHOLDERS- Owners of the Company

Is Entitled to receive a copy of Statutory Report.
Is Entitled to receive copy of Annual Reports of directors, Annual
accounts and Auditors Report.
Right to transfer the share Or other interest in the company subject
to the provisions in the articles of the company.
Group Work:
13
GERMAN CORPORATE GOVERNANCE

The German Corporate Governance code presents essential statutory
regulation for the management and the supervision of German listed
companies and contains internationally and nationally recognized
standards for good and responsible Governance.
Group Work:
14
SHAREHOLDERS
OWNERS of the Company. They buy shares which represent
part ownership of a company.
Rights and Duties of Shareholders : Sell the shares
Purchase new shares issued by the company
Nominate directors
Vote
Being informed
Group Work:
15
SUPERVISORY BOARD
A group of individuals chosen by the stockholders of a company to
promote their interest through governance of the company and to
hire and supervise the executive directors and CEO.
The Supervisory Board is directly involved in decisions on matters of
fundamental importance to the company.
Regularly conferring with the Board of Management on the
companys strategic alignment and the implementation status of the
business strategy.
Group Work:
16
Rights and Duties of Supervisory board

Approves the annual Budget and financial framework.
Involved in decisions of fundamental importance to the enterprise.
Issues TERMS OF REFERENCE
Form committee.
Chairman coordinates the work within the board.
Group Work:
17
MANAGEMENT BOARD
Its a Body of elected or appointed members who jointly oversee the
activities of a company or an organization.
It Runs on the Board's own responsibility with the goal of
sustainably increasing the companys enterprise value and achieving
defined corporate objectives.
The Board of Management performs its tasks according to the law,

the Articles of Incorporation and the Boards rules of procedure, and
works with the companys other governance bodies in a spirit of trust.
Group Work:
18
Rights and Duties of Management Board

Defines the long-term goals and the strategies
Sets forth the principles and directives for the resulting corporate
policies
It coordinates and monitor activities
Defines the portfolio
Develops and deploys managerial staff
Allocates resources
Decides on the Groups financial steering and reporting
Group Work:
19
COMPARISON BETWEEN INDIA & GERMANY
Group Work:
20
Example: German Company- BMW

They have opted two-tier system of Corporate governance.
It has three representative bodies:
Shareholders
Supervisory Board
Board of Management.
The duties and authorities of these bodies derive from the Stock
Corporation Act and the Articles of Incorporation of BMW AG.
Group
Work:
http://annual-report2013.bmwgroup.com/reports/bmwgroup/annual/2013/gb/English/3070/
Complexity
& Risks in Global Supply Chains
statement-on-corporate-governance.html
21
German Company- BMW

Shareholders in AGM can engage in dialogue with the Board of
Management and the Supervisory Board.
Supervisory Board appoints the members of the Board of
Management and can, at any time, revoke an appointment if there is
an important reason.
The Board of Management requires the approval of the Supervisory
Board for certain major transactions. The Supervisory Board is not,
however, authorised to undertake management measures itself.
Group http://annual-report2013.bmwgroup.com/reports/bmwgroup/annual/2013/gb/English/3070/
Work:
Complexity
& Risks in Global Supply Chains
22
Example: Indian Company - TATA Motors

They have opted Unitary system of corporate governance
The Board of Directors alongwith its Committees provide leadership
and guidance to the Companys management.
Also direct, supervise and control the performance of the
Company
The Board currently comprises of 11 Directors out of which nine
Directors (82%) are Non-Executive Directors.
The Company has a Non-Executive Chairman.
Group Work:
http://www.tatamotors.com/about-us/pdf/report-on-corporate-governance.pdf
23
REFRENCES:
http://www.tatamotors.com/about-us/pdf/report-on-corporate-governa
nce.pdf
http://annualreport2013.bmwgroup.com/reports/bmwgroup/annual/20
13/gb/English/3070/
Group Work:
24
THANK YOU
ANY QUESTIONS PLEASE.???
Group Work:
25

Managing Diverse Markets: Corporate Governance in India and Germany

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Managing Diverse Markets: Corporate Governance in India and Germany

Uploaded by

Copyright:

Available Formats

Managing Diverse Markets

Presented by: Parth, Dinesh, Sahil, Rahul and Mehak

CORPORATE GOVERNANACE IN INDIA

CLAUSE 49: MAIN PROVISIONS

CORPORATE GOVERNANACE IN INDIA

BOARD OF DIRECTORS (BOD)

SHAREHOLDERS- Owners of the company

General Body Meetings provide an opportunity to the shareholders

SHAREHOLDERS- Owners of the company

Right to obtain copy of MOA and AOA.

SHAREHOLDERS- Owners of the Company

GERMAN CORPORATE GOVERNANCE

Rights and Duties of Supervisory board

The Board of Management performs its tasks according to the law,

Rights and Duties of Management Board

COMPARISON BETWEEN INDIA & GERMANY

Example: German Company- BMW

German Company- BMW

Example: Indian Company - TATA Motors

You might also like