7) Highlight the findings of Uday Kotak committee on corporate governance and examine the ethical dilemma the proposed reforms bring for businesses?(250 words)

Topic – corporate governance

7) Highlight the findings of Uday Kotak committee on corporate governance and examine the ethical dilemma the proposed reforms bring for businesses?(250 words)

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Why this question

The article discusses the recommendations of Uday Kotak committee on corporate governance and the impact that the implementation of the recommendations have had on the corporate sector in India and the ethical dilemmas that it presents before them. This question will be important for the corporate ethics of paper 4.

Key demand of the question

The question expects us to discuss the recommendations of the committee and thereafter, bring out what the impact of the reforms have been on corporate governance in India. Next, we need to discuss how the family run corporations in India are faced with certain ethical dilemmas and discuss the way forward.

Directive word

Examine –  When you are asked to examine, you have to probe deeper into the topic,  get into details, and find out the causes or implications if any .

Structure of the answer

Introduction – Highlight why corporate governance in India has been in focus because of certain scandals etc and how SEBI constituted the Uday Kotak committee.

Body

• Discuss the recommendations of the committee
  • Reduction in the maximum number of listed entity directorships from 10 to 8 by April 01, 2019 and to 7 by April 1, 2020
  • Expanding the eligibility criteria for independent directors
  • Enhanced role of the Audit Committee, Nomination and Remuneration Committee and Risk Management Committee
  • Disclosures of auditor credentials, audit fee, reasons for resignation of auditors, etc.
  • Disclosure of expertise/skills of directors
  • Enhanced disclosure of related party transactions (RPTs) and related parties to be permitted to vote against RPTs
  • Mandatory disclosure of consolidated quarterly results with effect from FY 2019-20
  • Enhanced obligations on the listed entities with respect to subsidiaries
• Discuss the reason why such reforms were necessitated and the impact that it’s implementation have had on corporate governance.
• Discuss the ethical dilemmas presented before family run businesses, higher level of accountability to stakeholders etc

Conclusion – Give your view and discuss way forward.