STRUCTURE

• Introduction – Definition of corporate governance (25 words)                    
• Body – Explain the principles of corporate Governance(125 words)
• Discuss about any three Indian companies in relation to their best corporate practices (125 words)
• Conclusion – Mention a short conclusion  (25 words)

ANSWER

A basic definition of corporate governance, which has been widely recognized, was given in a report by the committee under the chairmanship of Sir Adrian Cadbury tiled (the Cadbury Report): This definition of corporate governance has been endorsed in various other discourses on the subject, including the 1998 final report of the Committee on The Financial Aspects of Corporate Governance.

Business Roundtable supports the following core guiding principles of corporate governance:

• The board approves corporate strategies that are intended to build sustainable long-term value; selects a chief executive officer (CEO); oversees the CEO and senior management in operating the company’s business, including allocating capital for long-term growth and assessing and managing risks; and sets the “tone at the top” for ethical conduct.
• Management develops and implements corporate strategy and operates the company’s business under the board’s oversight, with the goal of producing sustainable long-term value creation.
• Management, under the oversight of the board and its audit committee, produces financial statements that fairly present the company’s financial condition and results of operations and makes the timely disclosures investors need to assess the financial and business soundness and risks of the company.
• The audit committee of the board retains and manages the relationship with the outside auditor, oversees the company’s annual financial statement audit and internal controls over financial reporting, and oversees the company’s risk management and compliance programs.
• The nominating/corporate governance committee of the board plays a leadership role in shaping the corporate governance of the company, strives to build an engaged and diverse board whose composition is appropriate in light of the company’s needs and strategy, and actively conducts succession planning for the board.
• The compensation committee of the board develops an executive compensation philosophy, adopts and oversees the implementation of compensation policies that fit within its philosophy, designs compensation packages for the CEO and senior management to incentivize the creation of long-term value, and develops meaningful goals for performance-based compensation that support the company’s long-term value creation strategy.
• The board and management should engage with long-term shareholders on issues and concerns that are of widespread interest to them and that affect the company’s long-term value creation. Shareholders that engage with the board and management in a manner that may affect corporate decision-making or strategies are encouraged to disclose appropriate identifying information and to assume some accountability for the long-term interests of the company and its shareholders as a whole. As part of this responsibility, shareholders should recognize that the board must continually weigh both short-term and long-term uses of capital when determining how to allocate it in a way that is most beneficial to shareholders and to building long-term value.
• In making decisions, the board may consider the interests of all of the company’s constituencies, including stakeholders such as employees, customers, suppliers and the community in which the company does business, when doing so contributes in a direct and meaningful way to building long-term value creation.
• This post is intended to assist public company boards and management in their efforts to implement appropriate and effective corporate governance practices and serve as spokespersons for the public dialogue on evolving governance standards. Although there is no “one size fits all” approach to governance that will be suitable for all U.S. public companies, the creation of long-term value is the ultimate measurement of successful corporate governance, and it is important that shareholders and other stakeholders understand why a company has chosen to use particular governance structures, practices and processes to achieve that objective. Accordingly, companies should disclose not only the types of practices they employ but also their bases for selecting those practices.

INDIAN COMPANIES WITH BEST CORPORATE GOVERNANCE

Bharti Airtel

• As a leading telecom operator with a global presence in more than 16 countries, Bharti Airtel bagged the Best Employer Award at the Aon Best Employers Learning and Conference Awards in 2017.
• The company offers flexible working hours to all its employees, along with remote and work-from-home options. It provides special incentives to women employees, such as 22 weeks of maternity leave for working mothers to allow for smooth transition back into regular working hours. Bharti Airtel’s office in Gurgaon provides day-care facilities for working mothers’ children to balance their role as parent and manage their professional commitments as well.
• Grocery shopping centres and health and fitness facilities are provided within the campus for ease and personal convenience of the employees.

Amazon India

In 2018, tech giant, Amazon India made a bold move when its head, Amit Agarwal, instructed his employees to refrain from responding to any emails or phone calls between 6 p.m. and 8 a.m. This was aimed at improving work–life balance for Indian local employees and promoting a stress-free working environment.

Tata Consultancy Services

• Tata Consultancy Services (TCS) placed in the top-10 Best Companies for Women in India in 2018. This was based on the results of the survey of 360 companies from different industries.
• TCS was able to achieve its high ranking for establishing a good work culture and promoting them within the organization. One of the company’s initiatives is Mpower, in which people managers at different centers deal with key employee issues. Another initiative, Maitree, aims to reach out to employees’ families and bring them together for various cultural