Government to bring in stringent norms to strengthen corporate governance practices
Institute of Company Secretaries of India
New Delhi: Distribution of gifts at shareholders’ meet will soon be a thing of past as the government brings in stringent norms to strengthen corporate governance practices and curb misdoings.The elaborate and stringent secretarial standards, to be effective from July 1, would also require companies to explain clearly the “objectives and implications” of resolutions that are put for voting by shareholders.
The standards, which have been put in place after extensive deliberations involving various stakeholders, would be compulsory and corporates that fail to comply with these norms could even face penalties under the Companies Act, 2013.“No gifts, gift coupons, or cash in lieu of gifts shall be distributed to members at or in connection with the meeting,” according to the Secretarial Standard on General Meetings. The norm would be applicable on all types of GMs as well as those of debenture holders and creditors of registered companies in India.
These standards have been prepared by the Institute of Company Secretaries of India and a notification has been sent after approval from the corporate affairs ministry.In a move that would help curb instances of dubious deals, a notice sent to shareholders would have to clearly explain in detail each item for which approval is sought by the companies.
( Source : PTI )
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