The Hindu : SEBI to take a final view on corporate governance

Online edition of India's National Newspaper
Wednesday, Feb 25, 2004

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SEBI to take a final view on corporate governance

MUMBAI, FEB. 24. The Securities and Exchange Board of India will take a final view on the recommendations of the corporate governance panel. The regulator was studying the report submitted by the group headed by Infosys Chairman, N. R. Narayana Murthy, and would take a view on the issues like nine year ceiling on the tenure of independent director, SEBI Chairman, G. N. Bajpai, told reporters here today on the sidelines of a seminar organised by Crisil and the Federation of Indian Chambers of Commerce and Industry (FICCI). He did not say when the final decision would be taken.

Too much of familiarity among directors (due to long tenure) could turn into friendship with implications for governance; so some balance had to be maintained, he said.

Referring to FICCI President, Y. K. Modi's observation that regulators sought far more information through disclosures, Mr. Bajpai said the regulations had to be evolved and some needed to be discarded.

"Many a time regulators, which are public sector in character, tend to approach matters with emphasis on form with risks of content being left out," he said.

The market regulator would not like to make governance code rating mandatory and instead the market forces should enforce CG practices on the companies, Mr. Bajpai said. According to international research, corporates with sound governance practices received higher premium for the shares in the stock market, he added. — PTI

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