4. Regulations in India

The Ministry of Corporate Affairs (MCA) is primarily concerned with the administration of the Companies Act 2013, The Limited Liability Partnership Act, 2008 & other allied acts, rules & regulations framed mainly for regulating the functioning of the corporate sector in accordance with law.

With the aim of improving standards of corporate governance of listed companies in India, a committee was requested to make recommendations to SEBI on the following issues:

• Ensuring independence in spirit of Independent Directors and their active participation in functioning of the company;
• Improving safeguards and disclosures pertaining to Related Party Transactions;
• Issues in accounting and auditing practices by listed companies;
• Improving effectiveness of Board Evaluation practices;
• Addressing issues faced by investors on voting and participation in general meetings;
• Disclosure and transparency related issues, if any;
• Any other matter, as the Committee deems fit pertaining to corporate governance in India.

The Committee was requested to provide its recommendations in the context of equity listed companies.

The Indian legal system has, for the most part, been compliant with the world's top corporate governance standards. Some other laws, rules, guidelines, and listing agreements, in general, which list the corporate governance mechanisms for firms in India are listed below:

• Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI). The Chartered Accountants Act of 1949 created the ICAI, a statutory body responsible for governing the practise of chartered accounting in India. The ICAI establishes accounting standards, administers certification tests, and controls member behaviour to uphold moral and professional standards. Additionally, it aims to maintain and increase public confidence in the Indian accounting profession.

• Standard Listing Agreement of Stock Exchanges is for companies whose shares are listed on the stock exchanges. The Standard Listing Agreement (SLA), which establishes the terms and conditions for a business's listing on a stock exchange, is a contract between a corporation and a stock exchange. Most stock exchanges in India, notably the Bombay Stock Exchange (BSE) and the National Stock Exchange, adopt the SLA, a standard document (NSE).

• Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI): The Secretarial Standards are designed to encourage openness, responsibility, and sound corporate governance.

Additional Information

Read more on principles of Corporate Governance|G-20| OECD

Read more on Corporate Governance| SEBI

Learn more on Corporate Governance| Harvard Law School Forum