Indian Redefined Corporate Governance: In the Context of Companies Act 2013

Abstract

Good corporate governance in the changing business environment has emerged as powerful tool of competitiveness and sustainability. Thus in order to grow, prosper and compete in international markets, demands to commit itself as reliable, innovative and prompt service provider to protect interest of stakeholders and should also become reliable business partners in order to prosper and to have all round growth. Due to growing need of regulations for current settings Companies Act 1956 has been in need of a substantial revamp for quite some time now, to make it more contemporary and relevant to corporations, regulators and other stakeholders in India and keeping in the mind dynamism of world level business to have flexibility in internal and cross border transactions. Large part of the new Act is addressing the protecting mechanism corporate governance, a set of redefined regulation focusing on protection of share holders wealth and stake holders abstract interest in the entity in wake of sophisticated innovation in communication and technology sector. The main objective of the paper is to asses changed regulation and possible impact on the business sector. The current Act has redefined the concept and has brought a radical change in the way corporations are governed in India, with an objective, to improve corporate regulatory framework and governance model. The 2013 Act, has laid down specific responsibilities on the Executive Management, Board of Directors and Audit Committee of the Companies. It has not only raised the bar by increasing a number of Risk Management and Governance requirements, but has also stated stringent penalties for non-compliance to these provisions. The inclusion according to demanding needs of society add responsibility to the corporations to protect not only share holders interest but their policies should be bi product of own development and stakeholders protection. The strong implementation in co operation with entities is believed to facilitate compliance and promoting highest standard of corporate governance in India.