Business Ethics and Corporate Governance, Second Edition

RULES OF THE GAME

• CEOs and CFOs to be directly responsible for risk management (Provision 4C), internal control systems (Section 5).
• Clause 49 is largely derived from the Sarbanes-Oxley Act.
• Companies seek legal advice, tap consultants to adopt new standards.
• Want clarity on ‘material’ association of independent directors.
• Fear new norms will lead to shortage of independent directors.
• Companies will have to spend more time and money on compliance.

Box 21.1 deals with Clause 49 of the listing agreement SEBI has formulated and the opinions of industrialists in the country.

Box 21.1 ‘BEING DONE TOO FAST’

As stated earlier, Clause 49 of the SEBI’s listing agreement draws this provision from the Sarbanes-Oxley Act in its totality and makes the ...