Tuesday, 10 March 2020

Codes and Guidelines of Corporate Governance


Codes and Guidelines of Corporate Governance

The process of development of codes and guidelines is started with the setting up of
different committees on corporate governance.
These committees gave formulated the codes of best conducts, which covers the different
areas such as board structure, remuneration of directors, shareholders’ rights etc.
Since banks are important players in the financial system, special focus on the Corporate
Governance in the banking sector becomes critical.
As per the recommendations made by the Ganguly committee, the banks could be asked
to come up with a strategy for implementation of the governance standards recommended.
Once the strategy is received from all banks, the progress of implementation could be
reviewed after a period of twelve months. Thereafter, the position could be reviewed halfyearly
or annually, as deemed appropriate.

Basel II: The second of the Basel Accords, which are recommendations on banking laws and
regulations issued by the Basel Committee on Banking Supervision.
Executive director: Working director of a firm who is usually also its full time employee and has
a specified decision making role.
Non-bank financial companies: Financial institutions that provide banking services without
meeting the legal definition of a bank.
Notes Non-executive director: Non-working director of a firm who is not an executive director and,
therefore, does not participate in the day-to-day management of the firm.
Sarbanes-Oxley Act: Law which establishes a broad array of standards for public companies,
their management boards, and accounting firms.
Whistleblowers: A person who tells the public or someone in authority about alleged dishonest
or illegal activities occurring in an organisation.

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