An additional effort has been made to understand the corporate governance structure and practices prevalent in top 100 companies forming part of the Nifty and Junior Nifty indices. Board size, board composition, contribution of directors at board meetings, role of independent directors, constitution of committees, auditor rotation practices, etc. have been analyzed. The report also looks at a post meeting analysis of outcomes of 2012 AGMs along with key developments initiated in 2012 to encourage shareholder activism in India.
Key Highlights of the Report:
Resolutions Analysis
A total of 4,271 resolutions proposed by 588 companies (Companies of the S&P 500 and BSE 500 indices which formed part of our coverage universe)
Of the 4,271 resolutions proposed in 2012 proxy voting season, there were 3,711 ordinary resolutions and 560 special resolutions. Further, 3,811 resolutions were proposed by management and 460 resolutions were proposed by shareholders
Most resolutions at AGMs passed through show of hands
72% of the resolutions passed unanimously with the remaining passed with requisite majority; Six resolutions were withdrawn/amended
Corporate Governance Structure of Top 100 (Nifty and Junior Nifty) Companies
10% of companies have board sizes of either more than 16 directors or less than 7 directors
9% of companies were non compliant with Clause 49; with less than 50% Independent Directors, with no Independent Chairman
One in five Directors attend less than 75% of Board Meetings
9% of Independent Directors have outside directorships in more than 10 public companies
22% of IDs have served on the Board for more than 9 years
Audit Committees of only 45 companies comprise only of Independent Directors
13 companies have not constituted a remuneration committee
53 companies have had the same Auditors for more than five years
Shriram Subramanian, Founder and MD of InGovern said “Corporate India has a long way to go before adhering to corporate governance best practices. The data stands out with even top companies not treating CG practices in the right spirit. Institutional investors and regulators should demand better practices from promoters and company management. The new Companies Bill is a small step in the right direction.”
InGovern is India’s first independent proxy advisory firm. InGovern assists institutional investors that have financial or reputation exposure to public companies. Our services include: (a) Vote Recommendations (b) Corporate Governance Research and Scorecards (c) CG Consulting and Education (d) Risk Monitoring (e) Directors’ and Executive Compensation Analysis. InGovern was founded with the objective of enhancing the corporate governance culture and shareholder activism of institutional investors in India. Our clients are institutional investors - domestic mutual funds and foreign institutional investors.
For more information visit our website or write to us at info@ingovern.com
InGovern Research Contacts:
Shriram Subramanian
M: +91-9844244411
E-Mail: shriram@ingovern.com
Mohan Kumar K
M: +91-9920766426
E-Mail: mohan@ingovern.com
