Page 190 - DCOM106_COMPANY_LAW

Unit 11: Corporate Governance

11.6 Summary Notes

A corporation, though producing and distributing goods and services, is not just an
economic and legal entity.

A manager should also realize that he is a trustee for the corporation for which he is
working.
As a corporation has social implications, it may be called a ‘public’ institution.

The responsibilities of the managers are co-extensive with the sphere of corporate
influence.
The financial institutions and the banks require the borrowing corporations to conform to
the declared social and economic policy of the government.
Corporate governance may be defined as a conscious effort by the corporate management
to balance judiciously the interests of its different stakeholders.
A reasonable or rational purpose of governance might aim to assure, (sometimes on
behalf of others) that an organization produces a worthwhile pattern of good results
while avoiding an undesirable pattern of bad circumstances.

11.7 Keywords

Complaint: Any allegation in writing by a complainant with a view to obtaining any relief
under the Act.
Consumer: Any person who buys any goods for consideration which has been paid or promised
or partly paid and partly promised.

Corporate Governance: A conscious effort by the corporate management to balance judiciously
the interests of its different stakeholders.

11.8 Review Questions

1. Explain the concept of corporate governance and its relevance in the present day corporate
world.
2. What disclosures are required to be made under the provisions of clause 49 of the Listing
Agreement?
3. What is the role of Audit Committee in relation to corporate governance?
4. Explain the different provisions of the Companies Act, 1956 concerning corporate
governance.
5. “Corporate governance is an international business issue.” Discuss.
6. “Corporate governance is used to monitor whether outcomes are in accordance with
plans; and to motivate the organization to be more fully informed in order to maintain or
alter organizational activity.” Explain.

7. How corporate governance means to assist in decision making and to improve
accountability? Explain.
8. Describe the features of good corporate governance.

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