Sebi to align corporate governance norms with OECD principles

Principles to ensure the basis for an effective corporate governance framework

Market regulator Sebi today said it is in talks to keep the domestic corporate governance norms aligned with the global standards ratified by Organisation for Economic Co-operation and Development (OECD).

Paris-based OECD, an international grouping of top economic powers, has ratified six 'Principles of Corporate Governance', which have become a benchmark for policymakers, investors, corporations and other stakeholders worldwide.

"Sebi (Securities and Exchange Board of India) is having bilateral talks with OECD for keeping the corporate governance aligned with six fundamental principles ratified by OECD," Sebi Whole-Time Member Rajeev Kumar Agarwal said here.

These six principles involve ensuring the basis for an effective corporate governance framework, the rights of shareholders, equitable treatment of shareholders, role of stakeholders in corporate governance, disclosure and transparency, and the responsibility of the boards, he said.

Speaking at a seminar organised by NSE in association with the National Institute of Securities Market (NISM) and BSE on corporate governance, Agarwal also called upon all the stakeholders to generate trust by displaying robust corporate governance practices.

He further said Sebi had last year held policy dialogue with OECD on 'Minority Shareholders Protection: Related Party Transactions' and it was attended by all stakeholders.

"We expect to have many such initiatives for the development of corporate governance standards in India," he added.

OECD was originally set up as a block of the American and European economic powers in 1960, but has started working with emerging giants like India, China and Brazil over the years.

Stating that the investors interest are being protected, Agarwal said trust is the most important element.

"We have to generate trust by displaying the corporate governance," he said.

Agarwal also expressed hope that the once the  proposed Company Bill is passed by the Parliament, it would further strengthen the legal framework for corporate governance.

"The proposed new Company Bill also contains certain provisions pertaining to corporate governance," he said.