The company affairs ministry has decided to have an umbrella agency of corporate governance which will set non-binding standards in line with the principles developed by the Organisation for Economic Co-operation and Development (OECD). This is to advocate the ‘spirit’ of governance to the industry, which sometime gets lost as companies follow the market regulator’s norms by the letter.
The National Foundation for Corporate Governance (NFCG), set up jointly by the company affairs ministry, the industry and professional regulators of accountants and company secretaries, will act as this agency and will initially evolve corporate governance principles in three areas — institutional investors, independent directors and auditing.
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