Corporate Governance is about ethical conduct: Smt. Ekta Bhal, TATVA Legal

The Federation of Andhra Pradesh Chambers of Commerce & Industry (FAPCCI) have organized an interactive session on  “Companies Act – 2013” on Thursday, 20th February, 2014 at 4.00 pm at J.S. Krishna Murthy Hall, Federation House, Red Hills, Hyderabad.

Smt. Ekta Bahl, Partner, TATVA Legal stated that the Corporate Governance is about ethical conduct in business. The Corporate Governance is beyond the realm of law. It stems from the culture and mindset of management and cannot be regulated by legislation alone.

Board of directors are trustees for the entire body of stockholders, and both good morals and common law imperatively demand that they shall manage all the business affairs of the company with a view to promote, not their own interests but the common interests of all those who have made an investment in the company she said.

According to the Supreme Court official liquidator Sri P.A. Tendolkar the A director may be shown to be so placed and to have been so closely and so long associated personally with the management of the Company that he will be deemed to be not merely cognizant of but liable for fraud in the conduct of the business of the Company even though no specific act of dishonesty is proved against him personally. He cannot shut his eyes to what must be obvious to everyone who examines the affairs of the Company even superficially Smt. Ekta Bhal said.

Appointment, Roles and Responsibilities of Directors under the Companies Act, 2013 the companies required minimum directors, such as Public company requires minimum 3 directors, private company requires at least 2 directors and one person company must have one director for that respective company she said.

First directors of a company until they are appointed by the general meeting could be named in the Articles of Association. In the absence of such a provision the individual subscribers to the Memorandum of Association would be deemed to be the First Directors. Listed company to have 1/3 of the total strength of the Board as Independent Directors and Other Companies. Central Government can notify other classes of companies to appoint Independent Directors. Independent Directors to be appointed from a data bank maintained by authorised bodies / institutions.

A company can appoint a managing director, if he is the managing director or manager of one, and of not more than one, other company if it is approved by a resolution passed by the consent of all directors at a meeting of the Board and a specific notice has been given to all the directors then in India Smt. Ekta Bahl, Partner, TATVA Legal stated at the interactive meeting.

Sri Srinivas Ayyadevara, President, FAPCCI, Sri Arun Luharuka-Partner, Luharuka & Associates, Hyderabad, Sri V.S Raju- Past President, Advisor, Corporate Affairs Committee, FAPCCI and Sri Ganesh Balakrishnan, Partner, Deloitte Haskins & Sells has participated at the meeting.