Post-Satyam fiasco, good corporate governance seem to have become the buzz-word amongst the country’s leading companies. The impact is visible, not only in the case of private firms but even in the public sector.
Even navaratana companies have begun to strengthen their corporate governance practices, and are talking about “stricter code of ethics.”
For instance, public sector gas utility GAIL (India) Ltd has announced that it is setting up an empowered ethics committee to guide the company's board on "correct business practices."
“The ethics committee shall work as conscience keeper and submit to the Board its recommendations for best corporate governance in the company,” chairman and managing director GAIL UD Choubey said.
The committee would consist of four independent directors and a government-nominated one. Neither the CMD nor any of the functional directors of the board would be members of the ethics committee.
Some of the aspects expected to be covered by the committee are: no conflict of interest, fair play, integrity and accountability, protection of corporate interest and assets, transparency in disclosures in revenue, expenses and investments etc, legal compliances, propriety and confidentiality.
This committee would be in addition to the audit committee that is already in place.