The Desirable Corporate Governance Code by CII (1998) for the first time introduced the concept of independent directors for listed companies and compensation paid to them. Further, after enactment of the Companies Act, 2013, SEBI has amended Clause 49 in 2013 to bring it in line with the new Act. Many of these recommendations were then incorporated in the Revised Clause 49 that is seen as an important statutory requirement. This was followed by constitution of the Narayana Murthy Committee (2003) by SEBI, which provided recommendations on issues such as audit committee’s responsibilities, audit reports, independent directors, related parties, risk management, independent directors, director compensation, codes of conduct and financial disclosures. On 21 August 2002, the Ministry of Finance appointed the Naresh Chandra Committee to examine various corporate governance issues primarily around auditor – company relationship, rotation of auditors and defining Independent directors. The issue of corporate governance for listed companies came into prominence with the report of the Kumar Mangalam Birla Committee (2000) set up by SEBI in the to suggest inclusion of a new clause, Clause 49 in the Listing Agreement to promote good corporate governance. For example, Desirable Corporate Governance Code by the Confederation of Indian Industries (CII) in 2009.
In addition to various acts and guidelines by various regulators, non-regulatory bodies have also published codes and guidelines on Corporate Governance from time to time.
Apart from this, the Monopolies and Restrictive Trade Practices Act, 1969 (which is replaced by the Competition Act 2002), the Foreign Exchange Regulation Act,1973 (which has now been replaced by Foreign Exchange Management Act,1999), the Industries (Development and Regulation) Act, 1951 and other legislations also have a bearing on the corporate governance principles. The Companies Act, 2013 provides a formal structure for corporate governance by enhancing disclosures, reporting and transparency through enhanced as well as new compliance norms. The Companies Act, 2013 got assent of the President of India on 29 th August, 2013 and it was enacted on 12 th September, 2013 repealing the old Companies Act, 1956.
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