Business Ethics and Corporate Governance, Second Edition

EMPHASIS ON TRANSPARENCY AND DISCLOSURE

Almost all committees in their codes and guidelines—the Cadbury Committee’s Code, the IFSA Guidelines and the Bosh Report, for example—have emphasized the need for openness, transparency and disclosure in these issues. Shareholders have a right to know the quantum, the basis and the manner of payments to directors. The Securities and Exchange Board of India in the recent changes that are effected in Clause 49 have a section that says that compensation paid to non-executive, independent directors should be fixed by the board and will require previous approval of shareholders. Shareholders’ resolution shall specify the limits for the maximum number of stock options that can be granted to non-executive directors, ...