SURESH GYAN VIHAR UNIVERSITY

Directorate of Distance Education Main Campus, Library Building, Mahal,

Jagatpura, Jaipur-302017.
Assignment Response Sheet
Website: www.sgvu.edu.in

Student Name: Kriti Kaushik

Program: MBA Specialization: HEALTHCARE MANAGEMENT

Enrolment / Ref. No.: SGVU45D6112273591

Subject: Business Ethics & Corporate Governance& HPM – 816

Semester: 4
For Office Use Only: Marks

Assignment 1 Assignment 2

Name of Evaluator

Signature of Evaluator

ASSIGNMENT: - 1

Q.1 Attempt any two questions

A. Discuss the concept of corporate governance. How does effective corporate

governance contribute to organizational success?

ANS:

Corporate governance refers to the system of rules, practices, and processes by which a
company is directed and controlled. It encompasses the relationships among the various
stakeholders involved in the organization, such as shareholders, management, the board of
directors, employees, customers, suppliers, and the community at large. The primary goal of
corporate governance is to ensure transparency, accountability, fairness, and responsibility in
the management and decision-making processes of the company.
Effective corporate governance contributes significantly to organizational success in several
ways:

Enhanced Transparency: Transparent corporate governance practices ensure that relevant

information about the company's operations, financial performance, and decision-making
processes is readily available to stakeholders. This transparency builds trust among investors,
customers, employees, and other stakeholders, leading to increased confidence in the
organization.

Accountability: Clear lines of accountability help ensure that decision-makers within the
organization are held responsible for their actions. By establishing mechanisms for oversight
and evaluation, corporate governance structures hold management accountable for their
performance and adherence to ethical standards.

Risk Management: Effective corporate governance frameworks include risk management

strategies that identify, assess, and mitigate risks faced by the organization. By addressing
risks proactively, companies can safeguard their assets, reputation, and long-term viability.

Strategic Decision-Making: Corporate governance structures facilitate strategic decision-

making processes by providing a framework for evaluating alternatives, assessing risks, and
aligning decisions with the company's long-term objectives. This ensures that decisions are
made in the best interests of the organization and its stakeholders.

Stakeholder Engagement: Corporate governance practices promote engagement with

stakeholders by providing mechanisms for their input and feedback. By considering the
interests of diverse stakeholders, companies can make more informed decisions that take into
account the broader impact of their actions.

Long-Term Sustainability: Companies with effective corporate governance practices are

better positioned to achieve long-term sustainability and value creation. By prioritizing
factors such as environmental stewardship, social responsibility, and ethical behavior, these
organizations can mitigate short-term pressures and focus on creating enduring value for
shareholders and society.

Attracting Capital: Investors are more likely to invest in companies with strong corporate
governance practices due to the reduced risk and increased transparency associated with such
organizations. Access to capital at favorable terms enables companies to fund growth
initiatives and capitalize on opportunities in the market.
C. Compare and contrast shareholder theory and stakeholder theory in the context of
corporate governance.

ANS:

Shareholder theory and stakeholder theory are two contrasting perspectives regarding the
purpose and focus of corporate governance. Here's a comparison of both:

Shareholder Theory:

Focus: Shareholder theory posits that the primary purpose of a corporation is to maximize
shareholder wealth. In this view, the interests of shareholders, who are the owners of the
company, are paramount.

Responsibility: According to shareholder theory, management's fiduciary duty is primarily to

shareholders. The goal is to generate profits and increase the value of the company's stock,
which benefits shareholders through dividends and capital appreciation.

Decision-Making: Decisions are evaluated based on their potential to enhance shareholder

wealth. This often translates into a focus on short-term financial performance metrics, such as
quarterly earnings and stock price.

Criticism: Critics argue that shareholder theory can lead to a narrow focus on short-term
financial goals at the expense of other stakeholders' interests, sustainability, and long-term
value creation.

Stakeholder Theory:

Focus: Stakeholder theory posits that corporations have a broader responsibility to consider
the interests of all stakeholders affected by their actions, not just shareholders. Stakeholders
include employees, customers, suppliers, communities, and society at large.

Responsibility: In stakeholder theory, management's fiduciary duty extends beyond

shareholders to encompass the well

-being of all stakeholders. Companies are expected to balance the interests of various
stakeholders and make decisions that create value for the entire ecosystem.

Decision-Making: Decisions are evaluated based on their impact on all stakeholders, not just
shareholders. Stakeholder theory advocates for a long-term perspective that takes into
account environmental, social, and governance (ESG) factors alongside financial
performance metrics.

Criticism: Critics of stakeholder theory argue that it can be challenging to balance the
competing interests of multiple stakeholders, potentially leading to decision-making paralysis
or conflicts of interest. Additionally, some argue that prioritizing stakeholders other than
shareholders may undermine the competitiveness and profitability of the company.
Q.2. Write short notes on the following topics

A. Business ethics

Business ethics encompasses the moral principles and values that guide the behaviors and
decisions of individuals and organizations in the business world. Here are some key points:

• Integrity: Upholding honesty and truthfulness in all business dealings. This includes
being transparent and fair in communication and transactions.
• Respect for Stakeholders: Recognizing the rights and dignity of all stakeholders,
including employees, customers, suppliers, and the community. Treating them with
fairness and consideration.
• Compliance with Laws and Regulations: Adhering to legal requirements and industry
standards. This includes issues such as labor laws, environmental regulations, and
product safety standards.
• Corporate Social Responsibility (CSR): Going beyond legal obligations to contribute
positively to society and the environment. This may involve philanthropy, sustainable
practices, and community engagement.
• Fair Treatment of Employees: Providing a safe and supportive work environment, fair
wages, opportunities for advancement, and respect for diversity and inclusion.
• Avoiding Conflicts of Interest: Acting in the best interest of the company and
stakeholders, rather than pursuing personal gain at their expense.
• Ethical Leadership: Demonstrating ethical behavior and setting a positive example for
others within the organization. Leaders play a crucial role in shaping the ethical
culture of a company.
• Accountability and Transparency: Taking responsibility for one's actions and
decisions, and being open and honest about them. This fosters trust among
stakeholders.
• Environmental Sustainability: Considering the impact of business activities on the
environment and taking measures to minimize harm and promote sustainability.
• Ethical Decision Making: Evaluating choices and actions based on ethical principles
rather than solely on profit or self-interest. This may involve considering the
consequences of decisions on various stakeholders and choosing the most ethical
course of action.

B. Corporate governance in banks

Corporate governance in banks refers to the system of rules, practices, and processes by
which a bank is directed and controlled. Here are some key points:

• Board of Directors: The board oversees the bank's strategic direction and ensures that
it operates in the best interest of shareholders and stakeholders. Directors are
responsible for setting policies, appointing senior management, and providing
oversight.
 • Risk Management: Banks face various risks, including credit risk, market risk, and
operational risk. Effective corporate governance involves implementing robust risk
management practices to identify, assess, and mitigate these risks.
• Compliance and Regulation: Banks operate in a highly regulated environment, subject
to laws and regulations aimed at maintaining financial stability and protecting
consumers. Corporate governance frameworks ensure compliance with relevant laws
and regulations, as well as industry standards.
• Transparency and Disclosure: Transparency is crucial in banking to maintain trust
among stakeholders. Banks are required to disclose relevant information about their
financial condition, performance, and risk exposure to shareholders, regulators, and
the public.
• Accountability: Bank management and board members are held accountable for their
actions and decisions. This includes providing explanations for performance
outcomes, adherence to regulatory requirements, and addressing concerns raised by
stakeholders.
• Internal Controls: Strong internal control mechanisms are essential to safeguard
assets, prevent fraud, and ensure the accuracy of financial reporting. Corporate
governance frameworks include controls to monitor and assess the effectiveness of
internal processes.
• Ethical Standards: Upholding ethical standards is fundamental to corporate
governance in banks. This involves promoting integrity, honesty, and fairness in all
dealings with customers, employees, regulators, and other stakeholders.
• Shareholder Rights: Corporate governance frameworks protect the rights of
shareholders, including the right to vote on important matters such as the election of
directors and major corporate transactions.
• Board Independence: Having independent directors on the board helps ensure
objective decision-making and oversight. Independent directors can provide valuable
perspectives and challenge management when necessary.
• Stakeholder Engagement: Effective corporate governance involves engaging with
various stakeholders, including shareholders, customers, employees, regulators, and
the community. Banks should consider stakeholder interests in their decision-making
processes.

C. Whistleblowing

Whistleblowing refers to the act of exposing wrongdoing, illegal activities, or unethical

behaviour within an organization. Here are some key points:

1. Definition: Whistleblowing involves individuals, often employees, reporting

misconduct or unethical behaviour within their organization to authorities, the media,
or other relevant parties.
2. Types: Whistleblowing can be internal, where the individual reports within the
organization, or external, where they report to outside entities such as regulatory
agencies, law enforcement, or the media.
3. Motivations: Whistleblowers typically act out of a sense of moral duty, seeking to
prevent harm or injustice, uphold ethical standards, or fulfill legal obligations.
However, personal grievances or retaliation can also motivate whistleblowers.
4. Protection: Many countries have laws to protect whistleblowers from retaliation,
including dismissal or harassment, by their employers. These laws often provide legal
remedies and safeguards to encourage reporting.
 5. Impact: Whistleblowing can have significant consequences, both positive and
negative. It can lead to the exposure and prosecution of wrongdoing, as well as
reforms to prevent future misconduct. However, whistleblowers may face personal
and professional repercussions, including ostracism, career damage, or legal
challenges.
6. Examples: Notable whistleblowing cases include Edward Snowden's revelations about
mass surveillance by the NSA, Chelsea Manning's disclosure of classified documents
to WikiLeaks, and Jeffrey Wigand's exposure of tobacco industry practices in the film
"The Insider."
7. Ethical Considerations: Whistleblowing raises ethical questions about loyalty to one's
employer versus obligations to society or the public interest. It also highlights the
importance of organizational transparency, accountability, and the protection of
whistleblowers' rights.

D. Cybercrime

Cybercrime refers to criminal activities that are carried out using computers, networks, and
the internet. Here are some key points:

1. Types of Cybercrime: Cybercrime encompasses a wide range of illegal activities,

including hacking, identity theft, phishing, malware distribution, online scams,
cyberbullying, ransomware attacks, and more.
2. Motivations: Cybercriminals may be motivated by financial gain, political agendas,
personal vendettas, espionage, or simply the desire to cause disruption or harm.
3. Methods: Cybercriminals use various techniques to carry out their activities, including
exploiting vulnerabilities in software and systems, social engineering tactics to
manipulate users, and deploying malicious code or malware.
4. Targets: Anyone with an online presence can be a target of cybercrime, including
individuals, businesses, government agencies, and non-profit organizations. Common
targets include financial institutions, healthcare providers, e-commerce platforms, and
critical infrastructure.
5. Impact: Cybercrime can have serious consequences, including financial losses,
reputational damage, loss of sensitive information, disruption of services, and even
physical harm in some cases.
6. Global Nature: Cybercrime knows no boundaries and can be perpetrated from
anywhere in the world. Cybercriminals often operate across international
jurisdictions, making it challenging for law enforcement agencies to track and
apprehend them.
7. Prevention and Detection: Preventing and detecting cybercrime requires a multi-
layered approach, including implementing robust cybersecurity measures, educating
users about potential threats, regularly updating software and systems, conducting
security audits, and collaborating with law enforcement agencies and cybersecurity
professionals.
8. Legislation and Law Enforcement: Governments around the world have enacted laws
and regulations to combat cybercrime and prosecute offenders. Law enforcement
agencies collaborate internationally through organizations such as Interpol to
investigate and apprehend cybercriminals.
9. Cybersecurity Awareness: Increasing cybersecurity awareness among individuals and
organizations is crucial for preventing cybercrime. This includes educating users
 about safe online practices, recognizing common threats, and knowing how to
respond to security incidents.
10. Emerging Threats: Cybercrime is constantly evolving, with cybercriminals developing
new techniques and tactics to bypass security measures. Staying vigilant and adapting
cybersecurity strategies to address emerging threats is essential in combating
cybercrime.

E. Frauds in banks

Frauds in banks are deceptive practices carried out with the intention of obtaining financial
gain through illegal or unethical means. Here's a brief overview:

1. Types of Bank Frauds: Bank frauds can take various forms, including:
• Embezzlement: Misappropriation of funds by employees or insiders.
• Identity Theft: Unauthorized use of someone else's personal information to access their
accounts or obtain credit.
• Forgery: Falsification or alteration of documents, signatures, or checks to deceive the
bank.
• Loan Fraud: Obtaining loans through false information or deceitful practices.
• Cyber Fraud: Unauthorized access to banking systems or phishing schemes to steal
sensitive information or transfer funds illegally.
• Money Laundering: Concealing the origins of illegally obtained money through complex
financial transactions.
2. Causes: Bank frauds can result from weaknesses in internal controls, lack of oversight,
collusion among employees, inadequate security measures, or technological
vulnerabilities.
3. Detection: Banks use various tools and measures to detect and prevent fraud, including
automated monitoring systems, transaction analysis, internal audits, and employee
training on fraud detection and prevention.
4. Consequences: Bank frauds can have severe consequences for individuals, businesses,
and the financial system as a whole. They erode trust in the banking system, result in
financial losses for victims, damage reputations, and may lead to legal action, fines, or
regulatory sanctions for the perpetrators and the institution involved.
5. Prevention and Regulation: Banks implement fraud prevention measures such as robust
authentication procedures, encryption, fraud detection algorithms, and employee
background checks. Regulatory bodies also enforce compliance with anti-fraud laws and
regulations, imposing penalties for non-compliance and encouraging reporting of
suspicious activities.
6. Examples: Notable bank frauds include the Enron scandal, where fraudulent accounting
practices led to the collapse of the company and implicated several banks, and the Bernie
Madoff Ponzi scheme, which defrauded investors of billions of dollars through a massive
investment fraud scheme.
 ASSIGNMENT: -2

Q.1

1. Explore the relationship between corporate social responsibility (CSR) and corporate
governance.

ANS: -

Corporate social responsibility (CSR) and corporate governance are two interrelated concepts
that govern how businesses operate and interact with society. While they are distinct, they
often intersect and influence each other significantly.

1. Definition:
• Corporate Social Responsibility (CSR): CSR refers to a corporation's voluntary
commitment to integrate social and environmental concerns into its operations and
interactions with stakeholders. It involves actions that go beyond legal requirements
and contribute to sustainable development.
• Corporate Governance: Corporate governance encompasses the systems, processes,
and structures through which a company is directed and controlled. It establishes the
framework for balancing the interests of various stakeholders, including shareholders,
management, employees, customers, suppliers, and the community.
2. Alignment of Objectives:
• Both CSR and corporate governance aim to enhance the long-term sustainability and
success of a company. While corporate governance primarily focuses on maximizing
shareholder value and ensuring accountability and transparency in decision-making,
CSR extends this focus to include broader societal and environmental concerns.
3. Board Oversight:
• Corporate governance structures, particularly boards of directors, play a crucial role
in overseeing CSR initiatives. Boards are responsible for setting CSR strategies,
monitoring their implementation, and ensuring alignment with the company's mission
and values.
• Effective corporate governance mechanisms, such as board committees dedicated to
sustainability or ethics, can help embed CSR principles into the company's culture
and operations.
4. Risk Management:
• CSR and corporate governance are closely linked in terms of risk management.
Failure to address social and environmental issues can lead to reputational damage,
legal liabilities, and financial losses, undermining shareholder value and trust in the
company.
 • By integrating CSR considerations into governance processes, companies can identify
and mitigate risks associated with environmental, social, and governance (ESG)
factors, enhancing resilience and long-term value creation.
5. Stakeholder Engagement:
• Both CSR and corporate governance emphasize the importance of stakeholder
engagement. Effective governance practices involve listening to and considering the
interests of various stakeholders, including employees, customers, communities, and
investors.
• CSR initiatives often require collaboration and dialogue with stakeholders to
understand their needs, expectations, and concerns, which can inform governance
decisions and foster trust and goodwill.
6. Regulatory Compliance:
• While CSR is primarily voluntary, corporate governance is subject to legal and
regulatory frameworks aimed at ensuring transparency, accountability, and ethical
conduct. However, there is increasing pressure on companies to integrate CSR
principles into corporate governance practices, driven by regulatory requirements,
investor expectations, and societal demands for responsible business conduct.

2. Analyse the ethical dilemmas faced by multinational corporations operating in

different countries with varying ethical standards.
Multinational corporations (MNCs) often face complex ethical dilemmas due to operating in
diverse cultural, social, and legal contexts. Here are some key ethical dilemmas they
commonly encounter:

1. Labor Standards: MNCs may face pressure to adhere to different labor standards
across countries. They may confront issues such as child labor, low wages, poor
working conditions, and lack of labor rights. Balancing profitability with fair
treatment of workers can be challenging, especially when local laws and cultural
norms differ.
2. Environmental Responsibility: Operating in countries with lax environmental
regulations can lead to dilemmas regarding pollution, resource depletion, and habitat
destruction. MNCs must decide whether to adopt stricter environmental standards
voluntarily or adhere only to local regulations, potentially risking reputational damage
and legal repercussions.
3. Corruption and Bribery: In some countries, bribery and corruption are deeply
ingrained in business practices. MNCs may face the dilemma of whether to comply
with local customs to secure contracts and approvals or uphold their ethical standards
by refusing to engage in corrupt practices. This decision can have significant legal and
reputational implications.
4. Human Rights Violations: MNCs operating in regions with poor human rights records
may face dilemmas related to complicity in human rights abuses. They must navigate
situations where their operations or business relationships indirectly contribute to or
benefit from violations such as forced labor, discrimination, or repression of dissent.
5. Cultural Sensitivity: Cultural differences can lead to ethical dilemmas related to
marketing, product development, and workplace practices. MNCs must decide
whether to adapt their strategies to align with local cultural norms, potentially
 compromising their global values, or maintain consistency across markets, risking
cultural insensitivity and backlash.
6. Tax Avoidance: MNCs often engage in complex tax strategies to minimize their tax
burden, taking advantage of differences in tax laws and loopholes between countries.
While such practices may be legal, they raise ethical concerns about fairness and
social responsibility, especially when they result in depriving countries of much-
needed tax revenue.
7. Supply Chain Management: MNCs face ethical dilemmas in managing complex
global supply chains, especially regarding labor conditions, environmental impact,
and human rights abuses among suppliers. Ensuring ethical sourcing practices
throughout the supply chain requires significant oversight and accountability.

Q.2. Write short notes on the following topics

A. Scope of business ethics
Scope of business ethics encompasses a wide range of considerations within the realm of
commerce and corporate conduct. Here are some key points to note:

1. Corporate Governance: Business ethics delves into the principles and practices that
guide how corporations are directed and controlled. This includes issues like
transparency, accountability, and fairness in decision-making processes.
2. Corporate Social Responsibility (CSR): Businesses have an ethical responsibility to
consider the impact of their operations on society and the environment. CSR
involves initiatives aimed at contributing positively to communities, minimizing
environmental harm, and upholding human rights standards.
3. Employee Relations: Ethical considerations extend to how businesses treat their
employees. This involves fair labor practices, non-discrimination, ensuring
workplace safety, providing fair wages, and fostering a supportive work
environment.
4. Consumer Relations: Businesses are expected to engage in ethical practices when
interacting with consumers. This includes providing accurate information about
products and services, maintaining product safety standards, and addressing
consumer concerns responsibly.
5. Supplier and Partner Relationships: Ethical business practices extend to dealings
with suppliers, partners, and other stakeholders in the supply chain. This involves
fair treatment, transparency, and ensuring that business relationships do not involve
exploitation or unethical practices.
6. Financial Integrity: Business ethics encompasses honesty and integrity in financial
dealings. This includes accurate financial reporting, avoiding fraudulent activities
such as embezzlement or insider trading, and ensuring compliance with financial
regulations.
7. Environmental Sustainability: Ethical businesses strive to minimize their
environmental impact and promote sustainable practices. This involves reducing
waste, conserving resources, and adopting eco-friendly technologies and processes.
 8. Legal Compliance: While ethics often go beyond mere legal requirements,
businesses are expected to comply with applicable laws and regulations. Ethical
behavior involves not only following the letter of the law but also upholding moral
principles that may exceed legal mandates.
9. Global Considerations: In an increasingly interconnected world, business ethics
also encompasses considerations of global impact. This includes respecting cultural
differences, adhering to international labor standards, and avoiding practices that
contribute to social injustices or human rights abuses in global supply chains.
10. Stakeholder Engagement: Ethical businesses engage with and consider the interests
of various stakeholders, including employees, customers, investors, communities,
and the environment, in their decision-making processes.

B. Insider Trading
1. Definition: Insider trading refers to the buying or selling of a security by someone
who has access to material, non-public information about the security.
2. Material Information: Information is considered material if it could influence an
investor's decision to buy or sell the security.
3. Non-Public Information: Information that hasn't been made available to the general
public.
4. Illegal Activity: Insider trading is illegal because it gives those with access to
privileged information an unfair advantage over other investors.
5. Regulation: Regulated by securities laws, such as the Securities Exchange Act of 1934
in the United States, which prohibits insider trading.
6. Penalties: Penalties for insider trading can include fines, imprisonment, and civil
lawsuits.
7. Enforcement: Enforcement agencies, such as the Securities and Exchange
Commission (SEC) in the U.S., actively monitor and prosecute cases of insider
trading.
8. Impact: Insider trading undermines market integrity and erodes investor confidence in
the fairness of the financial markets.
9. Civil and Criminal Liability: Insider trading can lead to both civil and criminal
liability for those involved, including company insiders and individuals who receive
insider information unlawfully.
10. Prevention: Companies often establish policies and procedures to prevent insider
trading among their employees and executives, including blackout periods and
mandatory reporting of trades.

C. Features of values
Certainly! Here are some brief notes on the features of values:
1. Subjectivity: Values are inherently subjective and vary among individuals and
cultures. They are influenced by personal beliefs, experiences, and cultural norms.
2. Stability: Values tend to be relatively stable over time, providing a framework for
decision-making and behavior across various situations.
3. Hierarchy: Values often form a hierarchical structure, where some values hold greater
importance than others. This hierarchy guides decision-making when values conflict.
 4. Consistency: Values exhibit consistency in behavior and decision-making. Individuals
strive to align their actions with their deeply held values, promoting integrity and
coherence in their lives.
5. Socially Constructed: Values are socially constructed and shaped by societal norms,
traditions, and institutions. They reflect shared beliefs and ideals within a community
or society.
6. Dynamic: While values generally remain stable, they can evolve over time due to
personal experiences, societal changes, and cultural shifts. This dynamism allows for
adaptation and growth.
7. Influence on Behavior: Values play a significant role in shaping behavior, attitudes,
and priorities. They serve as guiding principles that influence how individuals
perceive and interact with the world.
8. Emotional Significance: Values often hold emotional significance, eliciting feelings of
satisfaction, pride, or guilt depending on whether they are upheld or violated.
9. Cross-Cultural Variability: Although values are universal human phenomena, their
specific content and importance can vary across different cultures and societies.
10. Instrumental and Intrinsic Value: Values can be instrumental, serving as means to
achieve other goals, or they can have intrinsic value, being valued for their own sake.

D. Principles of Good Corporate Governance

here are some short notes on the principles of good corporate governance:

1. Transparency: Openness and clarity in communication, ensuring stakeholders have

access to accurate information about the company's performance, decisions, and
practices.
2. Accountability: Responsibility of the board, management, and employees for their
actions and decisions, ensuring adherence to laws, regulations, and ethical standards.
3. Fairness: Ensuring equitable treatment of all stakeholders, including shareholders,
employees, customers, suppliers, and the community, without favoritism or
discrimination.
4. Integrity: Upholding honesty, truthfulness, and ethical behavior in all aspects of the
organization's operations, including financial reporting, decision-making, and
relationships with stakeholders.
5. Responsibility: Acknowledging the company's impact on society and the
environment, and integrating social and environmental considerations into business
strategies and practices.
6. Independence: Maintaining independence and objectivity in decision-making
processes, particularly for the board of directors, to prevent conflicts of interest and
ensure effective oversight.
7. Compliance: Adhering to laws, regulations, and internal policies, as well as
voluntarily adopting best practices and standards to promote corporate governance
excellence.
8. Risk Management: Establishing robust risk management processes to identify, assess,
and mitigate risks that could affect the company's performance, reputation, or
stakeholder interests.
9. Long-Term Value Creation: Focusing on sustainable growth and value creation over
the long term, rather than short-term gains, to maximize shareholder value while
considering the interests of other stakeholders.
 10. Continuous Improvement: Commitment to ongoing evaluation, review, and
enhancement of corporate governance practices to adapt to changing circumstances,
emerging risks, and evolving best practices.

E. Role of SEBI in corporate governance

SEBI (Securities and Exchange Board of India) plays a crucial role in ensuring effective
corporate governance in India's financial markets. Here are some key points on its role:

1. Regulatory Oversight: SEBI acts as the primary regulatory body overseeing corporate
governance practices in listed companies. It formulates rules, regulations, and
guidelines aimed at promoting transparency, accountability, and fairness in corporate
behavior.
2. Disclosure Requirements: SEBI mandates listed companies to adhere to stringent
disclosure norms. This ensures that shareholders and other stakeholders have access
to timely, accurate, and relevant information about the company's financial
performance, management practices, and other material developments.
3. Code of Conduct: SEBI has established a code of conduct for listed companies and
their key personnel, including directors and top management. This code outlines
ethical standards, responsibilities, and duties to ensure integrity and professionalism
in corporate operations.
4. Board Structure and Composition: SEBI prescribes guidelines for the composition
and functioning of the board of directors. It emphasizes the importance of having a
balanced board comprising independent directors who can provide unbiased oversight
and strategic guidance.
5. Shareholder Rights: SEBI works to safeguard the rights of shareholders and promote
their interests. It encourages shareholder activism and engagement by facilitating
mechanisms such as e-voting, proxy voting, and shareholder resolutions.
6. Audit and Financial Reporting: SEBI sets standards for audit practices and financial
reporting to enhance the credibility and reliability of financial information provided
by listed companies. This helps in preventing financial irregularities and fraud.
7. Enforcement and Compliance: SEBI has enforcement powers to investigate violations
of corporate governance norms and take appropriate actions against errant companies
and individuals. This includes imposing fines, issuing warnings, and even initiating
legal proceedings in severe cases of misconduct.