Institutional EYE

Commentary on Corporate Governance Issues

Ram Rajya and Total Societal Indicators

The important question for companies is that should they be chasing TSI or ESG for its own sake or are their more tangible benefits? And the fear that investors have is whether they will underperform the benchmarks if they shift their gaze from shareholder returns to sustainability? Cyril Amarchand Mangaldas, a leading law firm, organized a day-long seminar in the first week of November to deliberate on the SEBI Committee on Corporate Governance’s Report aka the Kotak Committee Report. Borrowing the expression raja-praja from Uday Kotak’s foreword to the Report, the first session was provocatively titled “Moving from the raja-praja model to the custodian model.” In keeping with the spirit of

Giving IT its due in the boardroom

Going through the recommendations by the Uday Kotak Committee on Corporate Governance (Kotak Committee), I was pleasantly surprised to note two important recommendations. These are: Risk Management Committee (RMC) of a listed company will now be responsible for cyber security also. This recommendation has been made mandatory for the top 500 companies by Market Capitalisation. Listed entities may constitute an Information Technology Committee (TechComm) which, in addition to the risk management committee, will focus on digital and other technological aspects. Both of them are welcome suggestions. I will, however, recommend one tweak. And that is that even the second recommendation be made man

Shareholders flex their muscle

Shareholders have become more discerning when it comes to voting on resolutions. Since January 2014, 66 resolutions (for companies in the IiAS coverage list) have been defeated by shareholders. This is attributable to multiple factors the enhanced powers of shareholders under the new governance codes: Majority of minority voting increasing institutional ownership: the push from regulators towards a stewardship code and enhanced disclosures on voting patterns and rationale, and the advent of e-voting. IiAS’ analysis shows that multiple classes of resolutions are getting defeated - the prominent ones being related party transactions, director appointments and stock option plans. Under these ci

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