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.
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.
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.
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.
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
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