THIRUVANATHAPURAM: It has reported that a major portion of the work on a national policy on corporate governance is over, according to Mr Nesar Ahmed, president, the Institute for Company Secretaries of India (ICSI).
“I would say 60 to 70 per cent of the work is over,” Mr Ahmed, who was here on a visit, told.
The centre has set up a committee headed by industrialist Mr Adi Godrej to suggest a framework for the policy. The committee, of which Mr Ahmed is a member, will sit for a session in Mumbai in July for advanced discussions.
The committee has been requested to suggest a comprehensive policy to enable corporate governance of the highest quality in all classes of companies.
Mr Ahmed also expected to see the new Companies Law passed during the monsoon session of Parliament. The proposed legislation to replace the half-a-century old Company Law is now being examined by a parliamentary panel.
The new bill was listed for passage in the winter session but could not be taken in the wake of protests from the Opposition.
A standing committee of Parliament is going through the second draft of the bill, Mr Ahmed said.
Among other things, it suggests that large companies keep aside two per cent of their three-year average profit for works related to corporate social responsibility (CSR).
“The government has suggested that this be made obligatory on the part of companies to set apart the funds for CSR. But the standing committee is in favour of making it mandatory,” Mr Ahmed said.
He also made a case for embracing the limited liability partnership concept in business organisations. Popularly known as LLP, it combines the advantages of both the company and partnership into a single form of organisation.
Mr Ahmed was of the view that enterprises such a chit funds need to be regulated and brought under the ambit of corporate governance.
The state of Kerala has a lot of potential in promoting the LLP concept, which is ideal for small and medium companies based here.
(Business Line, 12 June 2012)