|Dr. M. Veerappa Moily Launches a Legal Compliance Manual Aimed at Increasing Compliance among Companies|
Union Corporate Affairs Minister Dr. M. Veerappa Moily today launched a Legal Compliance Manual (LCM) here in New Delhi. The objective of this manual is to ensure the compliance of Central and State Laws and follow the norms of good Corporate Governance. The LCM is jointly developed by the Indian Institute of Corporate Affairs (IICA) in association with Intel Technology India Pvt. Ltd (Intel India). This Legal Compliance Manual (LCM) will be available on IICA website, and could be used as a Reference Manual to help organizations remain compliant with applicable laws.
The Minister also released a compendium titled ” State of Corporate Governance in India- Policies to Reality” on this occasion. To compile this compendium the IICA had collaborated with the Thought Arbitrage Research Institute (TARI) and Indian Institute of Management, Calcutta (IIMC) had in 2011 for a collaborative arrangement to conduct a comprehensive study on the state of Corporate Governance in India covering four fundamental aspects of governance in India using quantitative and empirical research techniques.
Speaking on the occasion Dr. Moily said the concept of corporate governance is at a threshold in our nation where norms require a constant state of refinement to build a balance between voluntary and mandatory approaches. In an uncertain global scenario, it becomes pivotal to have a robust legal and compliance framework. The minister hoped that this initiative will provide a platform to small & large organizations to understand the importance of compliance and the significant role it plays in both strategic plans as well as their service quality. He applauded IICA and Intel India for this innovative approach.
The comprehensive Legal Compliance Manual is divided into key areas of business. Keeping in mind, the complex set of laws a business has to comply with at Central and State government level, the LCM can be used as a reference guide to solve 4 of the 5 impediments to compliance identified by IICA; the high risk of noncompliance, lack of knowledge of the laws, lack of systems within enterprises to monitor legal compliance, perception of compliance as an unnecessary burden and lack of uniform enforcement. This is a highly innovative Project consisting of numerous compliance obligations organized into chapters and states for easy reference for first time users. This is also the first time a multinational corporation like Intel has taken its own internal compliance framework and developed a generic version for public use.
The compendium, ”State of Corporate Governance in India- Policies to Reality” has extensively used empirical and quantitative data of over 5-7 years, which was supplemented by qualitative inputs, interviews and consultations.
The initial results were discussed in a comprehensive stakeholder consultation held in Delhi and hosted on the IICA website for over 3 months for public comments. The findings were subject to peer review by eminent experts, scholars and practitioners.
Corporate governance rules and mechanisms as they stand today in India has its genesis in the Anglo-Saxon model, which may not be wholly suited to Indian conditions. This series of papers analyses empirical data to test hypotheses on various topics of corporate governance and aims to contribute to improving the quality of business and regulatory decisions by basing them on researched facts rather than on anecdotal narratives. The study has 5 papers.
· Paper 1: Corporate Governance in India: Tracing the journey
· Paper 2: Effectiveness of RBI as a gatekeepers of corporate governance
· Paper 3: Effective ness of SEBI as a gatekeeper
· Paper 4: Auditors as gate keepers of Corporate Governance
· Paper 5: Relationship between earnings management and corporate governance characteristics in the Indian context
The results give sufficient grounds to believe that Indian Companies with better corporate governance characteristics as shown above would have lesser incentives for earnings management, thus strengthening the case for implementation of robust corporate governance norms.
IICA has been established by the Ministry of Corporate Affairs for capacity building and training in various subjects and matters relevant to corporate regulation and governance such as corporate and competition law, accounting and auditing issues, compliance management, corporate governance, business sustainability through environmental sensitivity and social responsibility, e-Governance and enforcement etc.