Final

BOARD COMMITTEE
DEFINETION-
 A BOARD OF DIRECTORS is a recognized
group of people who jointly oversee the
activities of an organization, which can be
either for-profit business, nonprofit
organization, or a government agency

A MEETING OF BOARD COMMITTEE OF RAILWAY COMPANY IN 1852
CORPORATE GOVERNANCE
 Governance is a word that barely
existed 30 years ago. Now it is in
common use not just in companies but
also in charities, universities, local
authorities and National Health Trusts.
It has become shorthand for the way an
organization is run, with particular
emphasis on its accountability,
integrity and risk management
CORPORATE GOVERNANCE IN INDIA
 Corporate governance in India is a system of
rules, practices, and processes to control a
company. The scope of corporate
governance and objective of corporate
governance in India has been for the first
time inoculated in the theory under
the clause 49 of the Listing Agreement of
SEBI but it was later included as the concept
of the corporate governance provided under
the Companies Act, 2013
NEED OF CORPORATE GOVERNANCE IN INDIA
 Importance and need of corporate

governance were felt after the Scams
such as Satyam and Sahara. It was
recognized that good corporate
governance not only improves
transparency and efficiency in a
company but also increases the
investor trust in the company.
Corporate governance focuses not only
on shareholders but on all the
SCANDL
E
SAHARA SATYAM
OTHERS KNOWN NAMES BOARD
board of COMMITTES
directors and
advisors
board of
governors
board of
managers
board of
regents
board
of trustees
board of
visitors
BOARD CHARACTERISTICS
Board Leadership – The effectiveness of board meetings depends

largely on the leadership ability of the chairperson to set an
agenda and direct discussions. The board agenda is usually
prepared by chairperson in collaboration with the CEO.
CEO Duality – implies that the company’s CEO holds both the
position of chief executive and the chair of the board of directors.
The are pros and cons of that model, but investors usually prefer
to separate the positions. If they don’t, then it is preferable that
the company’s board consists of a ‘substantial’ majority of
independent directors.
Lead Director – demand for Lead Director increased because of

the presence of CEO duality, resulting from growing concern that
duality places too much power in the hands of CEO, which may
impede board independence.
Board Composition – in terms of ratio of inside and outside
directors, and the number of directors influence the effectiveness
of the board. A board size of nine to fifteen is considered to be
adequately tailored to the number of board standing committees.
Board Authority – is granted trough shareholder elections. SOX

substantially expanded the authority of directors, particularly
audit committee members, as being directly responsible for hiring,
firing, compensating, and overseeing the work of the companies’
independent auditors.
Responsibilities – the primary responsibility of the board of

directors that the companies assets are safeguarded and that
managerial decisions and actions are made in a manner of
maximizing shareholders wealth while protecting the interests of
other shareholders
Resources – board of directors should have adequate resources to
effectively fulfill its oversight functions. Resources available to the
board consist of legal, financial, and information resources.
Board Independence – implies that, to be independent director

shouldn’t have any relationship with the company other than his or
her directorship that my compromise the director’s objectivity and
loyalty to the companies shareholders.
Director compensation – best practices suggest that increases in

stock ownership, reduction in cash payments, and charges in
compensation should be aligned with shareholders long-term
interest determined by board, approved by shareholders, and fully
disclosed in public reporting.
The following are some of the
important committees of the Board-
AUDIT COMMITTEE
the Audit Committee shall assist the Board of Directors in the
oversight of
(1) The integrity of the financial statements of the Company,
(2) The effectiveness of the internal control over financial
reporting,
(3) The independent registered public accounting firm’s
qualifications and independence,
(4) The performance of the Company’s internal audit function
and independent registered public accounting firms,
(5) The Company’s compliance with legal and regulatory
requirements,
(6) The performance of the Company’s compliance function.
*The Committee shall be appointed by the
Board and consist of at least three
Directors, each of whom are independent
of management and the Company as
defined by the Bylaws of the Company,
the SEC and the New York Stock Exchange
as well as Clause 49 of the Listing
Agreement. Two thirds of the members
shall be independent directors.
*All Committee members shall be

financially literate, or shall become
financially literate within a reasonable
period of time after appointment to the
Committee. The Committee shall aspire to
Meeting of Audit Committee:
The audit committee shall meet at least thrice a year.
One meeting shall be held before finalization of annual
accounts and one every six months. The quorum shall
be either two members or one third of the members of
the audit committee, whichever is higher and minimum
of two independent directors
Powers of Audit Committee:

The audit committee shall have powers which should
include the following:
To investigate any activity within its terms of
reference.
To seek information from any employee.
To obtain outside legal or other professional advice.
To secure attendance of outsiders with relevant
expertise, if it considers necessary.
GOVERNANCE
TogetherCOMMITTEE
with the audit and compensation
committees, the nominating/corporate governance
committee rounds out the three standing committees
of a public company’s board of directors. It plays a
critical role in overseeing matters of corporate
governance for the board, including formulating and
recommending governance principles and policies. As
its name implies, this committee is charged with
enhancing the quality of nominees to the board and
ensuring the integrity of the nominating process.
- consist of both executives and nonexecutives
directors; should be established to advise, review,
and approve management strategic plans, decisions,
and actions in effectively managing the company.
SHARE HOLDER
GRIEVANCE COMMITTEE
According to Clause 49-IV(G)(iii) of the Listing

Agreement, a board committee under the
chairmanship of a non-executive director shall
be formed to specifically look into the redressal
of shareholder and investors complaints like
transfer of shares, non receipt of balance
sheet, non receipt of declared dividends etc.
This committee shall be designated as
“Shareholders/ Investors Grievance Committee.
Powers of Share Holder Greviance
Committee :
•
To allot the Equity Shares of the Company and to ensure
• Efficient transfer of shares; including review of cases for

refusal of transfer transmission of shares and debentures;
• Redressal of shareholder and investor complaints like

transfer of shares, non-receipt of balance sheet, non-receipt
of declared dividends etc;
• Issue of duplicate / split / consolidated share certificates;
• Allotment and listing of shares;
• Review of cases for refusal of transfer / transmission of

shares and debentures;
RISK COMMITTEE
The committee comprises a minimum of three
independent non-executive directors, as well as
the chief executive and financial director. The
chair of the board may not serve as chair of this
committee. Members of the committee are
individuals with risk management skills and
experience.
The committee’s responsibilities include:

• Review and approve for recommendation to the board a risk
management policy and plan developed by management. The
risk policy and plan are reviewed annually.
• Monitor implementation of the risk policy and plan, ensuring an

appropriate enterprise- wide risk management system is in place
• Monitor that risks are reviewed by management, and that
management’s responses to identified risks are within
board-approved levels of risk tolerance.
• Ensure risk management assessments are performed

regularly by management.
• Issue a formal opinion to the board on the effectiveness of

the system and process of risk management.
• Review reporting on risk management that is to be included

in the integrated annual report.
• Review annually the charters of the group’s significant

subsidiary companies’ risk committees, and their annual
assessment of compliance with these charters to establish
if the committee can rely on the work of these risk
committees.
• Perform an annual self-assessment of the effectiveness of

the committee, reporting these indings to the board
THANK YOU

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BOARD COMMITTEE

group of people who jointly oversee the

activities of an organization, which can be

organization, or a government agency

 Importance and need of corporate

Board Leadership – The effectiveness of board meetings depends

Lead Director – demand for Lead Director increased because of

Board Authority – is granted trough shareholder elections. SOX

Responsibilities – the primary responsibility of the board of

Board Independence – implies that, to be independent director

Director compensation – best practices suggest that increases in

*All Committee members shall be

Powers of Audit Committee:

According to Clause 49-IV(G)(iii) of the Listing

• Efficient transfer of shares; including review of cases for

• Redressal of shareholder and investor complaints like

• Issue of duplicate / split / consolidated share certificates;

• Allotment and listing of shares;

• Review of cases for refusal of transfer / transmission of

The committee’s responsibilities include:

• Monitor implementation of the risk policy and plan, ensuring an

• Ensure risk management assessments are performed

• Issue a formal opinion to the board on the effectiveness of

• Review reporting on risk management that is to be included

• Review annually the charters of the group’s significant

• Perform an annual self-assessment of the effectiveness of

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