CORPORATE GOVERNANCE
By:
Group C
Aneesh Srivastava (B12008)
Ankan J Bhattacharyya (B12010)
Mandeep Singh (B12022)
Priti (B12030)
Trisha Chakrabarty (B12053)
AGENDA
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Corporate Governance: An Introduction
Principles of Corporate Governance
Corporate Governance in India
Regulations:
Sherman Antitrust Act (1890)
Clayton Act (1914)
Federal Trade Commission Act (1914)
Robinson-Patman Act (1936)
Celler-Kefauver Act (1950)
Consumer Goods Pricing Act (1975)
Securities Law (1933)
Sarbanes-Oxley Act (2002)
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Regulations in India
Corporate Governance:
An Introduction
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Corporate governance refers to the system by
which corporations are directed and controlled
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The governance structure specifies the
distribution of rights and responsibilities among
different participants in the corporation
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Provides the structure through which
corporations set and pursue their objectives, while
reflecting the context of the social, regulatory and
market environment
Principles of Corporate Governance
Rights and equitable treatment of
shareholders
 Interests of stakeholders
 Roles and responsibilities of the board
 Integrity and ethical behavior
 Disclosure & transparency
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Corporate Governance in India
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In India, SEBI defines it as, “acceptance by
management of the inalienable rights of shareholders
as the true owners of the corporation and of their
own role as trustees on behalf of the shareholders”
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The Indian approach is drawn from Gandhian
philosophies
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It also draws heavily from corporate governance
policies of USA & UK etc.
Sherman Anti-Trust Act
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Established in 1890
First act to prohibit “monopolies or attempts to
monopolize”
Provides for injunctions to restrain activities in
violation and allows for treble damages
Provides for criminal felony penalties for both
individuals & corporations
Also provides substantial fines & prohibitions
Clayton Act
Passed in 1914
 Supplemented the Sherman Act
 Includes limitations on
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Tying contracts
Exclusive dealings
Inter corporate stockholding
Interlocking directorates
Mergers
Federal Trade Commission Act
Established in 1914
 Prevents unfair methods of competition
and deceptive practices
 Empowered by Wheeler Lea Act by giving
it the power to regulate unfair practices
whenever the public is deceived
 Led to the establishment of the FTC
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Robinson-Patman Act
Established in 1936
 Known as Price Discrimination Act
 Amended the Clayton Act
 Defined price discrimination as unlawful
 Prohibits
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Brokerage allowances,
promotional allowances or furnished services or
facilities
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Enforced agencies the right to limit quantity
discounts
Celler-Kefauver Act
Established in 1950
 Known as Anti merger Act
 Amended the Clayton Act
 Broadened the power to prevent the
acquisition of companies which may
substantially impact competition
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Consumer Goods Pricing Act
Established in 1975
 Allowed Fair Trade pricing of consumer
goods to protect small retailers
 Made control of retail prices easier which
helped in
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Positioning products
Managing marketing channel margins
Securities Law
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Established in 1933
Designed to protect the investors and general public
In India, SEBI (Insider Trading) Regulations
1992, framed under Section 11 of the SEBI Act,
1992, are intended to prevent and curb the menace
of insider trading in Securities
With effect from 20th February 2002, SEBI amended
these Regulations and rechristened them as SEBI 9
Prohibition of Insider Trading Regulation , 1992
These Regulation have been further amended in
November 2002
Sarbanes-Oxley Act
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Introduced on July 30, 2002
Created as a response to the Enron Scam & the cases
related to WorldCom,Tyco etc.
Formed the base of modern Corporate Governance
Mandated a number of reforms to
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Enhance corporate responsibility
Enhance financial disclosure
Combat corporate and accounting fraud
Create Public Company Accounting Oversight Board to oversee
the auditing activities
Common Law
Also known as Uniform Commercial
Code
 Standard set of law that governs the
contract and associated case law
 It is adopted by all states in the USA
except Louisiana
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Competition Laws in India
The first competition law in India was the
Monopolies & Restrictive Trade
Practices (MRTP) in 1969
 After the liberalization drive in 1990’s it
was amended as Competition Act
(2002)
 Led to the Indian counterpart of FTC, the
Competition Commission of India
(CCI)
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MRTP: Key Points
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Regulation of Monopolistic Trade Practices:
oRegulate production & terms of sale
oProhibit action restricting competition
oFixing standards for goods produced
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Regulation of Unfair Trade Practices:
oAny such practice would lead to the agreement
getting null & void
Competition Act (2002):
Key Points
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As per the last amendment on December
10, 2012 this act states:
More power to the Chairperson of CCI to
conduct “dawn raids”
No organization can exert “collective
dominance”
“Turnover” definition to exclude taxes levied
on sales & distribution
Thank you