By IANS,
New Delhi : The government would issue guidelines on corporate governance by December-end and they would be voluntary for the first year, Corporate Affairs Minister Salman Khurshid said Monday.
The guidelines would become mandatory after a year post-discussions and to some extent, would borrow from a set of recommendations by a Confederation of Indian Industry (CII) task force, which was released Monday, the minister said.
“We want to do it by end of December. Not everything is going to be mandatory,” Khurshid said after unveiling the report here.
The new guidelines may have suggestions on several contentious issues like remuneration fixation, appointment of independent directors and their responsibilities and auditor’s liability.
Corporate Affairs Secretary R. Bandopadhyay said the government can reach a conclusion within a year of unveiling the guidelines on which all recommendations should be mandatory.
“After one year, the government can come to a conclusion whether certain provisions need to be done away with depending on the feedback,” Bandopadhyay said.
“We will also try to harmonise this code with the new Companies Act and other laws so that there are no contradictions,” he added.
Among some other CII recommendations that may find a place in the guidelines set by the government are:
– Specification on responsibilities of independent directors
– Structure of compensation to non-executive directors
– Separation of offices of chairman and chief executive
– Constitution of an audit committee comprising non-executive and independent directors
– Not more than 10 percent of audit revenues to come from single corporate client or group
– Auditors to be rotated every six years
– Adequate safeguards for whistleblowers