Banking, Finance & InsuranceCorporate Governance

What is Corporate Governance: Understanding the Process

Updated on Jan 31, 2025 08:04 IST

Jaya SharmaAssistant Manager - Content

Corporate governance is the collection of processes, rules and laws for operating and managing businesses. Its principles help in the identifying responsibilities of different members of the corporation. It also ensures delegating responsibilities to the right candidate. Since this is an important part of the corporate structure, you can opt for online corporate governance courses.

It is important for any organisation to resolve conflict of interest. Within corporate governance, actions are monitored. It is a method for aligning the interests of stakeholders. Corporate governance becomes effective when it is well-defined and ensures that the organisation functions ethically.

Principles of Corporate Governance

The following points highlight the principles of corporate governance:

Each shareholder should be treated equally and fairly. They should know about their rights and how they should exercise them.
Important information must be conveyed to investors and members of the community. Any legal and social obligation towards non-stakeholders must be upheld.
The board of directors should be accountable within corporate governance. They should maintain transparency and should appropriately review management practices.
There should be a defined code of conduct for executives and board of members.
Policies and procedures should be only disclosed to relevant stakeholders.

Acts and Standards in Corporate Governance

Corporate governance has become significant to bring in equality in the corporate sector against abusing authority. Following acts and standards have been passed in order to make the corporate sector secure and fair for all:

Sarbanes-Oxley Act is a 2002 US federal law that works against those who commit fraud by leveraging power. This was introduced to improve corporate governance in the United States.
The Gramm-Leach-Bliley Act monitors the use of private information by financial institutions. These organisations should explain how they are safeguarding and sharing customer’s personal information.
Basel II is a standard for minimising the financial impact of risk-prone operational decisions. This standard considers the rights of shareholders.

Purpose of Corporate Governance

One of the primary purposes of the corporate governance is to manage conflict of interest. This conflict is often between higher management and shareholders. This is known as the principal-agent problem where both parties have different interests and opinions. On one hand, shareholders may seek positive returns on their investments. On the other hand, higher management might put profits behind other business interests.

Corporate Governance Practises in India

The organisation framework of initiatives related to corporate governance in India includes two entities. These are the Securities and Exchange Board of India (SEBI) and Ministry of Corporate Affairs (MCA). Listed companies are regulated under Clause 49 which has been incorporated in the listing agreement of stock exchanges. Listed companies must comply with the provision of clause.

Clause 49 of Corporate Governance

Initially, clause 49 introduced the fundamental corporate governance practices in Indian companies. This brought in changes in governance and disclosures. The clause specified the minimum number of the independent directors in the board of a company. It was mandatory to set up audit committees as well as shareholders’ grievance committees. It put a limit on the number of committees that one director could serve in.

2002

In 2002, the SEBI constituted a committee to assess the effectiveness of corporate governance practices. This committee had to suggest improvements in these practices. Based on the recommendations, SEBI released a modified Clause 49 that came into effect in January 2006.

The revised clause focused on the protection of the interests of investors through improved governance practice.
It also clarified the independence criteria for directors as well as the responsibilities of the board.
There was a visible improvement in the quality and quantity of disclosures.
Responsibilities of the audit committee were consolidated in matters relating to financial reporting and internal controls.
It stressed on the accountability of the highest level of management.

2008

In April 2008, SEBI amended the clause to extend the rule about 50% independent directors to each Board of Directors wherein the non-executive Chairman is the promoter or is related to promoters of the company.

In December 2009, at the first India Corporate Week, the Ministry of Corporate Affairs released new Corporate Governance Voluntary and Corporate Social Responsibility Voluntary guidelines.

Table of contents

Why Learn Corporate Governance?
Syllabus of Corporate Governance
Popular Corporate Governance Colleges in India
Popular Private Corporate Governance Colleges in India
Popular Corporate Governance Specializations

Why Learn Corporate Governance?

One should plan to learn Corporate Governance for the following reasons:

Syllabus of Corporate Governance

The following topics are covered within the Corporate Governance course:

Section	Topic Area	Exemplification
A: Corporate Governance – Principles and Issues	Definitions and Issues in Corporate Governance	Origins and definitions of corporate governance Theories of corporate governance Shareholder primacy theory Agency theory Agency conflict Agency costs Stakeholder theory Approaches to corporate governance Shareholder value approach Stakeholder approach Inclusive stakeholder approach Enlightened shareholder value approach Principles of corporate governance Responsibility Accountability Transparency Independence Participation The corporate governance framework Applicable laws, regulations, standards and codes Rules-based approach Principles-based approach Hybrid approach Concepts of comply or explain Implementation of a governance framework Organization purpose Assimilation of governance practices Organizational success The importance of adopting good governance practices Consequences of weak governance Key issues in corporate governance Composition of boards Financial reporting Stakeholder relation Social responsibility and sustainability Compensation of directors and senior executives Shareholder and member engagement Performance of directors Risk management Technology and information governance
	History of Corporate Governance in Canada	Background\ The Dey Report The Kirby Report The Saucier Reports National Policy 58-201 & National Instrument 58-101 Other Financial Disclosure Rules Future Directions
	Governance in other countries and other sectors	Governance in US - SOX & Dodd-Frank5 Governance in UK – Cadbury to 2018 Governance Code Governance in Germany, Japan, China Global principles of corporate governance Governance issues in developing and emerging markets Governance in other sectors Financial institutions Public sector Not-for-profit sector Governance for family-controlled companies
	Role of the Company Secretary/ Governance Professional in Corporate Governance	The corporate secretary and corporate governance The requirements for a corporate secretary The role of the corporate secretary The corporate secretary as the ‘conscience of the company' The Corporate Secretary: Building trust through governance Qualifications and skills Position in the organisation Independence of the corporate secretary Liability of the corporate secretary Inhouse v. outsource corporate secretary
B: The Board of Directors and Leadership	Directors’ Duties and Powers	Powers of directors General duties of directors under the CBCA Duty to act within powers and for proper purposes Duty to promote the success of the company Duty to exercise independent judgement Duty to exercise reasonable skill, care and diligence Duty to avoid conflicts of interest Duty not to accept benefits from third parties Duty to declare interests in transactions Who can bring an action for a breach of the general duties Fraudulent and wrongful trading Directors’ and officers’ insurance
	Role and Membership of the Board	Role of the board Matters reserved for the board Role of the chair Role of the chief executive officer Separation of the roles of chair and chief executive Non-executive directors – role and independence Non-executive directors – effectiveness Senior independent director Board committees and NED Role of the Corporate Secretary
	Board Composition and Succession Planning	Board size Balance of skills, knowledge and experience Diversity Nomination committee Appointments to the board Accepting an offer of appointment Succession planning Refreshing board membership Annual Re-election
	Board Effectiveness	Decision-making processes Supply of information Board portals and electronic board papers Use of social media by boards Corporate culture Independent professional advice Performance evaluation On boarding and Professional Development
C: Disclosure	Financial Reporting to Shareholders and the External Audit	Financial reporting Requirements for financial reporting Investor confidence in financial reporting The role of the board in financial reporting Role of the corporate secretary in financial reporting Audit committee requirements Role and responsibility of the audit committee Meetings of the audit committee Audit committee relationship with the board Audit committee relationship with shareholders Audit committee report Role of the corporate secretary in relation to the audit committee External auditor Role of the external auditor Auditor independence Non-audit services Auditor rotation Role of the corporate secretary in relation to the external auditors
	Corporate Social Responsibility, Sustainability and Business Ethics	Definition of corporate social responsibility (CSR) History of CSR The business case for CSR Categories of CSR activity CSR frameworks Integrated thinking Advising the board on being socially responsible Sustainability Advising the board on planning for sustainability Business ethics The role of the corporate secretary in building an ethical culture Difference between business ethics, corporate responsibility and sustainability
	CSR and Sustainability Reporting on non-financial issues	CSR reporting and the law Drivers for voluntary CSR reporting Measuring CSR initiatives Triple bottom line reporting Integrated reporting Global Reporting Initiative Sustainability Accounting Standards Board IIRC integrated reporting framework Corporate Reporting Dialogue CSR benchmarking External assurance Environmental Profit & Loss Accounts The corporate secretary’s role in CSR reporting
D: Risk Management and Internal Control	Risk Management and Internal Control Systems	The Nature of Risk Internal Control System The Canadian Corporate Governance Framework The Turnbull Committee Report on Internal Control The Role of Internal Audit Risk Management The Role of the Board (or Audit Committee) in Risk Management and internal controls Risk Management Committees Common failures of boards
	Risk structures, policies, procedures and compliance	Governance structures and players Policies and procedures Whistleblowing Cybersecurity Information Governance Disaster recovery plans The Corruption of Foreign Public Officials Act Conflict prevention and resolution Senior Executive Compensation and Risk
E: Corporate Governance Systems, Controls and Issues	Shareholders’ and Members’ Rights and Engagement	Definitions Separation of Ownership and Control The relationship between the board and shareholders Shareholder Rights Common abuse of shareholder rights Shareholder expectations Institutional shareholder responsibilities Proxy Advisor Influence Responsible Investment v. socially responsible investment Member Rights in the NFP world
	Board Engagement with Shareholders and other Stakeholders	Shareholder engagement Annual general meetings Electronic communication Engagement with other stakeholders CBCA requirements to consider other stakeholders The role of the Governance Professional in Stakeholder Engagement
	Compensation of Directors and Senior Executives	Compensation as a corporate governance issue Elements of compensation for executive directors and senior executives CCGG Principles on compensation Compensation committee Compensation Disclosures for public companies Directors’ compensation policy Compensation for loss of office and rewards for failure Listing Rule provisions on long-term incentive schemes

Popular Corporate Governance Colleges in India

Following are the most popular Corporate Governance Colleges in India. Learn more about these Corporate Governance colleges (Courses, Reviews, Answers & more) by downloading the Brochure.

AIMS IBSBangalore

Admission '26 Placement Cutoff

Banking, Finance & Insurance Courses

2 Courses (280+ Seats)

Exams

MAT XAT CAT CMAT KMAT Karnataka PGCET CBSE 12th Karnataka 2nd PUC +6 more

Total Tuition Fees

₹6.75 L

Median Salary

₹6.8 LPA

Course Rating

4.622

Ranked

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ISBR Business SchoolBangalore

Admission '26 Placement Cutoff

Banking, Finance & Insurance Courses

4 Courses (675+ Seats)

Exams

MAT XAT CAT CMAT ATMA NMAT KMAT Karnataka PGCET +6 more

Total Tuition Fees

₹10.5 L - 12.5 L

Placement Rating

4.2

Course Rating

4.282

Ranked

─

Will You Get In?

Shri Dharmasthala Manjunatheshwara Institute for Management DevelopmentMysore

Admission '26 Placement Cutoff

Banking, Finance & Insurance Courses

2 Courses (240+ Seats)

Exams

MAT XAT CAT CMAT ATMA +3 more

Total Tuition Fees

₹12.7 L

Placement Rating

3.8

Course Rating

4.262

Ranked

─

Jain Deemed-to-be University, BangaloreBangalore

Admission '26 Placement Cutoff

Banking, Finance & Insurance Courses

12 Courses

Exams

JET

Total Tuition Fees

₹3 L - 9 L

Median Salary

₹7.78 LPA

Course Rating

4.067

Ranked

─

Banking, Finance & Insurance Applications open. Apply Now

Galgotias UniversityGreater Noida

Admission '26 Placement Cutoff

Banking, Finance & Insurance Courses

10 Courses

Exams

CUET SAT India CUET-PG MAT XAT NMAT CMAT +5 more

Total Tuition Fees

₹75 K - 4.6 L

Placement Rating

3.8

Course Rating

4.0284

Ranked

─

Banking, Finance & Insurance Applications open. Apply Now

LPU - Lovely Professional UniversityJalandhar

Admission '26 Placement Cutoff

Banking, Finance & Insurance Courses

7 Courses (518+ Seats)

Exams

LPU NEST MAT XAT CAT CMAT CBSE 12th ISC PSEB 12th +6 more

Total Tuition Fees

₹2 L - 10.8 L

Median Salary

₹7.25 LPA

Course Rating

4.4690

Ranked

─

Will You Get In?

Banking, Finance & Insurance Applications open. Apply Now

View All Popular Colleges

Popular Private Corporate Governance Colleges in India

University of Bristol, MumbaiMumbai

Banking, Finance & Insurance Courses

2 Courses (120+ Seats)

Exams

─

Total Tuition Fees

₹22 L

Median Salary

─

Course Rating

─

Ranked

─

Sri Sri UniversityBhubaneswar

Admission '26 Placement Cutoff

Banking, Finance & Insurance Courses

3 Courses (150+ Seats)

Exams

MAT CAT XAT CMAT ATMA +3 more

Total Tuition Fees

₹1 L - 7.8 L

Median Salary

₹6.45 LPA

Course Rating

4.017

Ranked

─

Banking, Finance & Insurance Applications open. Apply Now

Techno India UniversityKolkata

Admission '26 Placement Cutoff

Banking, Finance & Insurance Courses

3 Courses (60+ Seats)

Exams

CBSE 12th ISC WBCHSE MAT CAT +3 more

Total Tuition Fees

₹3.16 L - 4.74 L

Placement Rating

3.1

Course Rating

3.513

Ranked

─

Chandigarh University (CU)Chandigarh

Admission '26 Placement Cutoff

Banking, Finance & Insurance Courses

7 Courses

Exams

CUCET Chandigarh University

Total Tuition Fees

₹5.64 L - 8.72 L

Placement Rating

4.0

Course Rating

4.2339

Ranked

─

Banking, Finance & Insurance Applications open. Apply Now

Symbiosis Skills and Professional UniversityPune

Admission '26 Placement Cutoff

Banking, Finance & Insurance Courses

2 Courses (90+ Seats)

Exams

MAT SNAP CAT MHT CET CBSE 12th ISC Maharashtra HSC +5 more

Total Tuition Fees

₹8.84 L - 13.39 L

Placement Rating

4.3

Course Rating

3.74

Ranked

─

Banking, Finance & Insurance Applications open. Apply Now

SRM School of Management, SRMIST - SRM Institute of Science and Technology, ChennaiChennai

Admission '26 Placement Cutoff

Banking, Finance & Insurance Courses

1 Course (120+ Seats)

Exams

MAT XAT CAT NMAT CMAT TANCET SRMJEEM +5 more

Total Tuition Fees

₹11.5 L

Placement Rating

4.4

Course Rating

4.610

Ranked

─

Will You Get In?

View All Popular Colleges

Popular Corporate Governance Specializations

Following are the most popular Corporate Governance Specializations . You can explore the top Colleges offering these Specializations by clicking the links below.