Good corporate governance is the foundation upon which the environment of trust, transparency and accountability is built. In an environment of interdependence of world economies and due to increased globalisation and integrated capital market, relevance of corporate governance has gained a renewed focus as its contribution is largely translated into the corporations’ stability and sustainable development.
The need for information is growing manifold. It is a big challenge for business enterprises to acquire and manage information. Also, information is very important from an investment perspective for informed decision-making. In this regard, timely relevant disclosures to stakeholders would contribute immensely to the transparency and trust that are so vital for good corporate governance.
Real meaning of good governance perhaps could be better understood, especially in view of the financial scams and crises that keep occurring intermittently. Collapse of major global companies in the past has brought back the focus on weak corporate governance system and its resulting in the loss of integrity of financial markets. Some of such corporate failures have brought to the fore the importance of critical aspects of governance like role of Independent Directors, shareholder activism and protection of minority shareholders. Different countries are revisiting their existing corporate governance practices and norms, as in a dynamic economic environment, the system of Corporate Governance needs to be evolved.
In this regard, the Institute of Chartered Accountants of India (ICAI) has all along endeavoured to encourage the appropriate corporate governance and provide assistance in laying down the benchmarks. ICAI has been working with the Government submitting memoranda on various aspects of corporate governance to the Committee on Public Undertakings which is examining the Corporate Governance in Central Public Sector Undertakings as a horizontal study. Further, it has also made a presentation on Professionalisation of Board of Central Public-Sector Enterprises before the Parliamentary Committee on Industry.
Organising training programmes on Independent Directors across the country and conducting conferences/ seminars/symposiums on the theme of corporate governance, ICAI has on its cards to bring out publications on the provisions of Independent Directors from corporate governance perspective and the Technical Guide on Audit Committee and Audit Committee Review Checklist.
Today, corporate governance and Chartered Accountants are inseparable since it is difficult to have good governance without involving the finance professionals. They are like two sides of the same coin. Newer challenges are emerging, particularly in the spheres of Companies Act 2013, Insolvency and Bankruptcy Code, 2016, valuation, Direct Tax Code, Goods and Services Tax, XBRL, IFRS-converged Ind AS, integrated reporting, e-commerce, environmental accounting, international taxation, technology consulting, ERP implementation, forensic accounting, and fraud detection. No doubt, the Indian accountancy profession has come a long way. But it has miles to go. There are many challenges to be met, many frontiers to be conquered and histories to be made.