India has thought about it
but implementation ? who cares…
Following are some key highlights of changes in clause 49 and its differences from requirements of Companies Act 2013. Overall framework for Corporate Governance Revised clause 49 lays down overall framework or objectives of requirements of clause 49 and companies are expected to interpret and apply those provisions in alignment with the principles. Key components of those framework are
- Rights of Shareholders
- Role of stakeholders in Corporate Governance
- Disclosure and transparency
- Responsibilities of board and other responsibilities.
Many of the principles laid down in this framework are aligned with powers, duties and expectation from various stakeholders especially directors and management in the Companies Act 2013.
The “Role of stakeholders in corporate governance” reads as below in the government gazette (page7, Chapter 2, 4d): The listed entity shall recognise the rights of its stakeholders and encourage co-operation between listed entity and the stakeholders, in the following manner:
(i) The listed entity shall respect the rights of stakeholders that are established by law or through mutual agreements.
(ii) Stakeholders shall have the opportunity to obtain effective redress for violation of their rights.
(iii)Stakeholders shall have access to relevant, sufficient and reliable information on a timely and regular basis to enable them to participate in corporate governance process.
(iv)The listed entity shall devise an effective whistle blower mechanism enabling stakeholders, including individual employees and their representative bodies, to freely communicate their concerns about illegal or unethical practices.
SEBI does take cognizance of complaints and incrimination information against entities violating securities laws, through its SCORES (SEBI COmplaints REdress System) platform and otherwise.
For instance, Tata Steel is starting to reward all its employees, including contract workers, as much as Rs.1 lakh for whistleblowing, said Tripti Roy, ethics counsellor at Tata Steel. Indian enterprises need to establish whistleblower/hotline for reporting of HR/ non-compliance/ fraud to report into top audit committee of the organization. It will continue remain a dream in India as the checks and balances are not there. Dont expect things will change for next decade.