CORPORATE GOVERANCE
In today’s business world, transparency, ethics, and accountability are no longer optional. Investors, regulators, and even customers expect businesses to act responsibly — not just profitably.
That’s where Corporate Governance steps in — the invisible framework that ensures your business decisions are ethical, transparent, and in the best interest of all stakeholders.
Corporate Governance refers to the system of rules, processes, and practices that direct and control a company. It defines who makes decisions, how those decisions are made, and how accountability is maintained. In short — it’s how a company runs itself responsibly.
It covers everything from how the board operates to how disclosures are made, how risk is managed, and how shareholder interests are protected.
Every company registered under the Companies Act, 2013 or Limited Liability Partnership Act, 2008 must submit annual returns and financial statements to the Registrar of Companies (ROC), maintained by the Ministry of Corporate Affairs (MCA).
Importance of Corporate Governance
Corporate governance ensures transparency, accountability, and ethical decision-making within a company. Maintaining proper board and committee records, along with audited financial statements and annual returns, reflects disciplined management and regulatory compliance. Policies like the Code of Conduct, Whistleblower, and Risk Management safeguard integrity and stakeholder trust. Registers and disclosures help trace decisions and prevent conflicts of interest. Together, these practices strengthen investor confidence and establish the company’s reputation for responsible and lawful governance.
FAQs
Primarily the Board of Directors. However, regulators like SEBI, MCA, and stock exchanges monitor listed entities.
Yes. CSR falls under Section 135, which is a key component of corporate governance ensuring ethical contribution to society.
No, but highly recommended even for private companies. For listed companies, it’s mandatory under Regulation 22 of SEBI (LODR).
Corporate governance is about principles and ethics and Compliance is about following specific rules and filings. Governance is proactive; compliance is reactive.
These are transactions between the company and its directors, relatives, or entities controlled by them — they must be disclosed and approved to avoid conflicts of interest.
It’s a non-compliance under Section 177 and can lead to fines up to ₹5 lakh and scrutiny from ROC/SEBI.