Code For Corporate Governance Released

The Confederation of Indian Industry released a corporate governance code on Tuesday during the concluding session of its annual session. The first copy of the Desirable Corporate Governance a Code, drafted by Omkar Goswami, was presented to former finance minister P Chidambaram.

The code reiterates that key information regarding the company like annual operating plans and budgets, quarterly results of the company, internal audit reports and any show-cause or prosecution notices from revenue authorities must be placed before the board of directors by the management.

Information regarding defaults such as non-payment of inter-corporate deposits by or to the company, or materially substantial non-payment for goods sold by the company, details of any joint venture and any transaction that involve substantial payment towards goodwill and brand equity should also be placed before the board, the code states.

The code also says that any listed company with a turnover of over Rs 100 crore should set up an audit committee.

These Committees should consist of at least three members, all drawn from a companys non-executive directors who have adequate knowledge of finance, accounts and basic elements of company law.