India has come a long way since its independence in terms of social, political and economic development. However, it continues to grapple with issues of inclusiveness, equity and sustainable growth; this has a strong underlying impact on the country’s business environment. In light of this, the Indian Government amended the Companies Act to mandate companies to make investments for the cause of the betterment of society. With this, India became the first country in the world to legislate Corporate Social Responsibility.
To make our Companies Act more contemporary and relevant to corporates, regulators and other stakeholders in India and to effectively handle some of the present day challenges of a growing industry, Companies Act, 2013 (“2013 Act”) was enacted in August 2013- to significantly change the regulations as applicable to the Companies in India.
In an ever intriguing debate on how much impact the New Companies Act has on the business leaders, the conservatives also agree on the need to have an increased level of diligence by the Boards/ CEOs to effectively discharge an array of direct responsibility that the act has imposed on them.
The New Companies Act has significant implications on aspects of board governance and purports to improve the standard of corporate governance in India. The legislation focuses on improving transparency in the working of the Board by establishing its accountability in various company related reporting matters.
In this post, Anurag Malik, Partner, People & Organisation Advisory Services, EY shares his viewpoint on key modifications that have been brought about in the Companies Act, 2013 and how it aims to raise the governance profile of Indian companies and Boards, and bring them on par with the best global standards. Continue reading
In Conversation with Deepak Satwalekar
Deepak Satwalekar retired as the Managing Director and Chief Executive Officer (MD & CEO) of HDFC Standard Life Insurance Company Ltd. Prior to that,he was the Managing Director of HDFC,the country’s largest mortgage lender. In addition, Mr.Satwalekar has been a consultant to the World Bank,the Asian Development Bank and other bilateral and multilateral agencies and has worked in several countries. He also serves as an independent director on the boards of some large companies in India. In a recent interaction with Neville Dumasia, Partner and National Leader, Risk Advisory Services for EY, Mr. Satwalekar shares his perspective on a broad range of issues impacting today’s boards.
Neville Dumasia (ND): What are the most critical challenges facing audit committee members today and what do you see as the most effective approach to addressing these?
In India, the archaic Companies Act, 1956 was in direct need of a complete revamp especially after a string of high profile scams in the Corporate World. Indian Government, realising the need for a better and comprehensive governance policy for businesses in India that has some global prominence approved the Companies Act, 2013 with the approval of the Indian Parliament and the Executive. In this post read about how Companies Act, 2013 strikes the right chord with prevalent issues in business administration and brings in sweeping changes in the way Companies are governed in India.