Companies need to have awareness on the regulations, according to R.K. Padmanabhan, Executive Director of the Securities and Exchange Board of India.
Addressing a meeting on “Corporate Governance Norms in India as per Companies Bill, 2012” organised by the Indian Chamber of Commerce and Industry, Coimbatore, here on Thursday, he said that business was not just production.
Compliance was part of business and hence awareness on regulations was a must. In the case of small companies, mostly the auditors were the compliance officers.
The role of auditors, independent directors and merchant bankers was important in corporate governance.
Independent director was another key area. According to the bill they were only entitled to sitting fee, reimbursement of expenses and profit-related commission.
A body notified by the Central Government would maintain a data bank of independent directors.
The new concepts that the Companies Bill, 2012 had introduced were one person company, small company, dormant company and registered valuer. Most of the Indian companies had owner-driven model.
The bill focused on the control aspect of the promoter. Several provisions in the Companies Act were also modified or strengthened.
K.N.V. Ramani, corporate lawyer, said that business was now based on the concept of people, planet and profit. There were social, ecological responsibilities. Corporate governance and responsibility was a business structure formulated on this concept.
R.R. Balasundharam, president of the chamber, spoke.