Cadbury Committe

Topics: Corporate governance, Corporation, Board of directors Pages: 1 (274 words) Published: January 25, 2013

The Cadbury Committee in the UK defined corporate governance as “the system by which companies are directed and controlled.” To a great extent, this is true. The need for corporate governance has increased, particularly due to the increasing number of scams that are being reported, such as Satyam and Nasscom. Corporate governance in India aims to establish better transparency and responsibility in governing the way corporations are managed. Further, corporate governance in India helps a company to meet the laws that stipulate various legal and environmental requirements and also to build trust with the general public about the efficiency of the system that it follows. Corporate Governance in India: Some Important Points

Here are some important points about corporate governance in India: Role of Board of Directors
An independent and efficient ‘board of directors’ is the essence of a good corporate house. The core responsibility of the board of directors is to adhere to the legal procedures and regulations while directing the management, administering the operations of a company and working towards the interests of stakeholders. Composition of the Board

It was suggested by the UK Cadbury committee that a crucial role can be played by non-executive directors. They can incorporate their independent judgment regarding the management of the company. Audit Committee

Under the Companies Act 1997, an audit committee must be established by all public limited companies with a paid up capital of Rs.5 crores or above. The audit committee helps to reduce the incidents of frauds and scams. Shareholder’s Committee

The code of conduct set by the SEBI ensures that complaints of the shareholders are properly resolved.
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