Press Release
New company act to be introduced in parliament in April: Komal Anand

The Government is in the process of revising the Company Law of 1956 to make it more internationally competitive in the global scenario of today. This was announced by Ms. Komal Anand, Secretary, Secretary, Ministry of Company Affairs at a National Seminar on Directing Board Performance organized by the Confederation of Indian Industry and the National Foundation for Corporate Governance here today.

Inaugurating the seminar, Ms. Anand said that a simplified law which would “facilitate effective business leadership and provide an environment for flourishing of enterprise in a climate of discipline and accountability would be introduced in Parliament in April.”

Another novel feature introduced by the Ministry of Company Affairs, she said, was e Governance that would revolutionalise the concept of Governance. She disclosed that the project MCA 21,initiated by the Government, would come into effect by 24th April, under which companies can file their returns and make their financial records available for scrutiny.

The Ministry is also on the verge of introducing the Accountability Adoption Standards, which would come into effect from April 1, she said. This would set a benchmark for the Indian industry, making it viable at the international level, adding more transparency and accountability, she added.

Giving a background of the National Foundation for Corporate Governance, Ms .Anand said that it was set up last year with a view to deliberating on issues relating to good corporate governance, sensitizing corporate leaders and self regulation and directorial responsibilities and providing training in the field of Corporate Governance.

At the same time she pointed out that that “board is appointed by the shareholders and other key stakeholders and are accountable to them. They are representatives of the share- holders and not of the management,” she said.

Prof. Bob Garratt, noted author of several books and an acknowledged expert in the area of governance and board performance, in his first visit to India, said in his introductory remarks said-“much will depend on who will be the dominant 21 st century power, in terms of language- English, Mandarin, Hindi, Spanish and Arabic in the world.” Much would also depend on China’s initiatives to introduce a Company law in their country by the next year.

According to Prof. Garratt, as of now, the model countries in the field of Corporate Governance were UK, South Africa, Canada and Australia but none of them were perfect.

Praising the initiatives taken by the Indian Government in enacting a model Company Law, Pof. Garratt said that many countries in the world did not even have such a law and the record of USA in this area was particularly dismal.

He stated that the role of Governance was no longer restricted to listed companies but had come to include unlisted companies and central and local governments as well.

Listing the seven principles of public life he said selflessness, integrity, objectivity, accountability, openness, honesty and leadership were universally accepted principles which had to be adhered to because whatever the laws and regulations, much of the corporate governance depended on the level of personal integrity of the people involved in the process of governance.

New Delhi
9 February 2006

Programme
Sessions
The Essence of Performance Governance by Professor Bob Garratt
Directing Versus Managing Prof Bob Garratt
Analytical Tools to make a board sit up an Indian Case Study
Impact of Performance on family boards.