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    Kumar Mangalam Birla Committee Report & Recommendations

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    ksonali
    The Kumar Mangalam Birla Committee was formed to review corporate governance practices from an investor perspective and develop a code of best practices. The Committee made 25 recommendations, 19 of which were mandatory. The key recommendations included having an independent board with at least 50% independent directors, establishing audit and remuneration committees, and increasing disclosure standards around director compensation. The goal was to promote high standards of governance and protect shareholder interests.

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    Kumar Mangalam Birla Committee Report & Recommendations

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    ksonali
    80 views7 pages
    The Kumar Mangalam Birla Committee was formed to review corporate governance practices from an investor perspective and develop a code of best practices. The Committee made 25 recommendations, 19 of which were mandatory. The key recommendations included having an independent board with at least 50% independent directors, establishing audit and remuneration committees, and increasing disclosure standards around director compensation. The goal was to promote high standards of governance and protect shareholder interests.

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    KMB Report

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    The Kumar Mangalam Birla Committee was formed to review corporate governance practices from an investor perspective and develop a code of best practices. The Committee made 25 recommendations, 19 of which were mandatory. The key recommendations included having an independent board with at least 50% independent directors, establishing audit and remuneration committees, and increasing disclosure standards around director compensation. The goal was to promote high standards of governance and protect shareholder interests.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    80 views7 pages

    Kumar Mangalam Birla Committee Report & Recommendations

    Uploaded by

    ksonali
    The Kumar Mangalam Birla Committee was formed to review corporate governance practices from an investor perspective and develop a code of best practices. The Committee made 25 recommendations, 19 of which were mandatory. The key recommendations included having an independent board with at least 50% independent directors, establishing audit and remuneration committees, and increasing disclosure standards around director compensation. The goal was to promote high standards of governance and protect shareholder interests.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 7

    Kumar Mangalam Birla Committee

    Report & Recommendations


    To view corporate governance from the point of
    view of investors and shareholders, to prepare a
    code to suit the corporate environment.
    Outcome
    • The Committee made 25 recommendations,
    19 of them were `mandatory
    • To promote and raise the standards of
    corporate governance.
    • Aplies to listed companies of paid up capital of
    Rs. 3 crores .
    Recommendations
    • Composition of Board of Directors
     Distinction between non-executive directors, independent and
    non-independent ones.

     Independence: Independent directors have only the income


    from the director’s remuneration. They do not have any other
    relationship with company or its promoters, management or
    its subsidiaries.
     All pecuniary relationships of non-executive directors be
    disclosed in the annual report
    Recommendations Contd…
    • Independent and non-independent directors should help
    bring an independent judge to bear on boards deliberations
    especially on issues of strategy, performance, management of
    conflicts and standards of conduct.
    • Optimum combination of independent and non-independent
    board of directors, not less than 50 percent independent.
    • Incase of Non-executive chairman- 1/3rd board have
    independent directors
    • Executive chairman: Half the board be independent
    Contd…
    • Non executive chairman- Entitled to maintain chairman’s
    office at company’s expense

    • Reimbursement of expenses incurred in performing duties, to


    discharge functions effectively

    • This is a non mandatory recommendation


    Contd..
    • Audit Committee- With 3 independent directors, with 1
    having financial and accounting knowledge.

    • Remuneration committee – Disclosure in annual report


    relating to all elements of remuneration package of directors
    like salary, bonus, ESOPs, pension, benefits etc.
    Remarks
    • By and large, Indian listed companies have been legally
    mandated to follow fairly strict standards of corporate
    governance and disclosure.
    • Indian corporate sector regulators and companies have been
    quick to incorporate some of the best international corporate
    governance and disclosure practices

    • The need of the day is more training… of directors, audit


    committee members and senior executives of companies
    • The challenge is to design and sustain a system that imbibes
    the spirit of corporate governance… and not merely the letter
    of the law

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