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ETHICS, GOVERNANCE AND SUSTAINABILITY ... ETHICS, GOVERNANCE AND SUSTAINABILITY SUSTAINABILITY MODULE 2 PAPER 6 ICSI House, 22, Institutional Area, Lodi Road, New Delhi 110 003 tel

Mar 27, 2021

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  • STUDY MATERIAL

    PROFESSIONAL PROGRAMME

    ETHICS, GOVERNANCE AND ETHICS, GOVERNANCE AND ETHICS, GOVERNANCE AND ETHICS, GOVERNANCE AND

    SUSTAINABILITYSUSTAINABILITYSUSTAINABILITYSUSTAINABILITY

    MODULE 2

    PAPER 6

    ICSI House, 22, Institutional Area, Lodi Road, New Delhi 110 003

    tel 011-4534 1000, 4150 4444 fax +91-11-2462 6727

    email [email protected] website www.icsi.edu

  • (ii)

    © THE INSTITUTE OF COMPANY SECRETARIES OF INDIA

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  • (iii)

    PROFESSIONAL PROGRAMME

    ETHICS, GOVERNANCE AND SUSTAINABILITY

    Corporate Governance has emerged as an important academic discipline in its own right, bringing together contributions from accounting, finance, law and management. Corporate governance now offers a comprehensive, interdisciplinary approach to the management and control of companies. Corporate professionals of today and tomorrow must imbibe in themselves the evolving principles of good corporate governance across the globe on a continual basis. Excellence can be bettered only through continuous study, research and academic and professional interaction of the highest quality in the theory and practice of good corporate governance. The corporate world looks upon especially Company Secretaries to provide the impetus, guidance and direction for achieving world-class corporate governance.

    Company Secretaries are the primary source of advice on the conduct of business. This can take into its fold everything from legal advice on conflicts of interest, through accounting advice, to the development of strategy/corporate compliance and advice on sustainability aspects.

    The paper on Ethics, Governance and Sustainability has been introduced to provide knowledge on global development on governance, ethics and sustainability aspects and best governance practices followed worldwide.

    This paper would help in understanding of national and international governance norms, ethical business practices, corporate sustainability, CSR and sustainability reporting, role of various governance forums etc.

    The study material is based on those sections of the Companies Act, 2013 and the rules made there under which have been notified by the Government of India and came into force w.e.f. April 01, 2014 (including Amendments/Clarifications/Circulars issued there under upto January 2017). In respect of sections of the Companies Act, 2013 which have not been notified, applicable sections of Companies Act, 1956 have been dealt with in the study. The study material is also updated as per SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015. This study has also been updated as per the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. further students are advised to keep themselves abreast of latest developments on governance and sustainability issues by regularly reading economic dailies and visiting the websites of regulatory bodies, national and international corporate governance forums. Students are also advised to read regularly the ‘Student Company Secretary’/’Chartered Secretary’ wherein all important regulatory amendments are reported regularly.

    In the event of any doubt, students may write to Directorate of Academics in the Institute for clarification at [email protected] Although due care has been taken in publishing this study material, yet the possibility of errors, omissions and/or discrepancies cannot be ruled out. This publication is released with an understanding that the Institute shall not be responsible for any errors, omissions and/or discrepancies or any action taken in that behalf.

    Should there be any discrepancy, error or omission in the study material, the Institute shall be obliged if the same is brought to its notice for issue of corrigendum in the Student Company Secretary.

  • (iv)

    PROFESSIONAL PROGRAMME

    SYLLABUS

    FOR

    MODULE 2 – PAPER 6: ETHICS, GOVERNANCE AND SUSTAINABILITY (100 Marks)

    Level of Knowledge: Advance Knowledge

    Objective: To acquire knowledge of ethics, emerging trends in good governance practices and

    sustainability.

    Contents:

    Part A: Ethics and Governance (70 Marks)

    1. Introduction

    • Ethics, Business Ethics, Corporate Governance, Governance through Inner Consciousness and Sustainability

    • Failure of Governance and its Consequences

    2. Ethical Principles in Business

    • Role of Board of Directors

    • Organization Climate and Structure and Ethics

    • Addressing Ethical Dilemmas

    • Code of Ethics; Ethics Committee; Ethics Training; Integrity Pact

    • Case Studies and Contemporary Developments

    3. Conceptual Framework of Corporate Governance

    • Introduction, Need and Scope

    • Evolution of Corporate Governance

    • Developments in India

    • Developments in Corporate Governance – A Global Perspective

    • Elements of Good Corporate Governance

    4. Board Effectiveness - Issues and Challenges

    • Board Composition; Diversity in Board Room; Types of Directors; Board’s Role and Responsibilities

    • Chairman, CEO, Separation of Roles

    • Relationship between Directors and Executives

    • Visionary Leadership

  • (v)

    • Board Charter, Meetings and Processes

    • Directors’ Training and Development

    • Performance Evaluation of Board and Directors

    5. Board Committees

    • Introduction

    • Various Board Committees, their Composition, Role and Responsibilities, Contribution to Board Governance

    • Audit Committee

    • Shareholders Grievance Committee

    • Remuneration Committee

    • Nomination Committee

    • Corporate Governance Committee

    • Corporate Compliance Committee

    • Other Committees

    6. Legislative Framework of Corporate Governance in India

    • Under Listing Agreement, SEBI Guidelines, Companies Act

    • Corporate Governance in

    • PSUs

    • Banks

    • Insurance Companies

    7. Legislative Framework of Corporate Governance – An International Perspective

    • Australia

    • Singapore

    • South Africa

    • United Kingdom

    • Contemporary Developments in the Global Arena

    8. Risk Management and Internal Control

    • Risk and its Classification

    • Risk Management and Oversight

    • Enterprise Risk Management

    • Internal Control

    • Roles and Responsibilities of Internal Control

    • Disclosure about Risk, Risk Management and Internal Control

  • (vi)

    9. Corporate Governance and Shareholder Rights

    • Rights of Shareholders

    • Challenges in Exercising Shareholders Rights

    • Corporate Governance issues with regard to Related Party Transactions

    • Role of Investor Associations in Securing Shareholders Rights

    • Role of Institutional Investors in Corporate Governance

    10. Corporate Governance and Other Stakeholders

    • Employees

    • Customers

    • Lenders

    • Vendors

    • Government

    • Society

    11. Corporate Governance Forums

    • The Institute of Company Secretaries of India

    • National Foundation for Corporate Governance

    • Organisation for Economic Co-operation and Development

    • Global Corporate Governance Forum

    • Institute of Directors

    • Commonwealth Association of Corporate Governance

    • International Corporate Governance Network

    • The European Corporate Governance Institute

    • Conference Board

    • The Asian Corporate Governance Association

    • Corporate Secretaries International Association

    Part B: Sustainability (30 Marks)

    12. Sustainability

    • Meaning and Scope

    • Corporate Social Responsibility and Corporate Sustainability

    • Sustainability Terminologies and Meanings

    • Why is Sustainability an Imperative

    • Sustainability Case Studies

    • Triple Bottom Line (TBL)

  • (vii)

    13. Corporate Sustainability Reporting Frameworks

    • Global Reporting Initiative Guidelines

    • National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business

    • International Standards

    • Sustainability Indices

    • Principles of Responsible Investment

    • Challenges in Mainstreaming Sustainability Reporting

    • Sustainability Reporting Case Studies

    14. Legal Framework, Conventions, Treaties on Environmental and Social Aspects

    15. Principle of Absolute Liability – Case Studies

    16. Contemporary Developments – Integrated Reporting