The term ‘corporate governance‘ raises a debate: is it an analogy or just a metaphor? Could it be considered a discipline on its own or is it a part of business ethics? This is a question of etymology rather than of corporate Iegalese. Pundits of different disciplines, like economics, management, law and political science, considered the corporate a social mechanism necessary to carry out the day-to-day activities of life. However, the statement might not be
accepted by traditionalists who consider the corporate simply as a vehicle of investment. Vlfl Gossett, Vice—President in General Council of the Ford Motor Company, once said ‘The modern corporation is a social and economic institution that touches every aspect of our lives; in many ways it is an institutionalised expression of our way of life. During the past 50 years industry in corporate form has moved from the periphery to the very centre of our social and economic existence. Indeed it is not inaccurate to say that we live in a corporate society’. This book, written in a lucid style, aims to provide the reader with a quick overview of the subject. It explains the need for corporate governance. The book records the perceptions of different authors across the globe with the aim of giving the reader as comprehensive a picture as possible.

Contents
Preface ................................................................................................. vii
Foreword............................................................................................... ix
Acknowledgement ................................................................................. xv
Quotation ...........................................................................................xvii
Contents .............................................................................................. xix
CHAPTER 1
Corporate Governance Rule, Norms or Business Practice ............ 1
1.1 EMERGENCE OF THE IDEA ............................................................. 1
1.2 CORPORATE GOVERNANCE: A NORM ............................................... 4
1.3 EVOLUTION AND ECONOMIC POWER .............................................. 5
1.4 CORPORATE GOVERNANCE AS IT IS UNDERSTOOD............................ 8
1.4.1 United Kingdom............................................................... 8
1.4.2 United States of America ................................................10
1.4.3 Australia ..........................................................................10
1.4.4 Canada ............................................................................11
1.4.5 Japan ...............................................................................12
1.4.6 South Africa ....................................................................13
1.4.7 India ................................................................................13
1.5 CORPORATE GOVERNANCE AND ITS ATTRIBUTES ............................15
1.5.1 Shareholder’s Right .......................................................16
1.5.2 Rights of Stakeholders ...................................................18
1.5.3 Board and Its Accountability ........................................20
1.5.4 Role of the Market Regulator and
Corporate Governance ...................................................23
1.6 EXTRACTS ...................................................................................24
1.6.1 Australia .........................................................................24
1.6.2 Brazil ..............................................................................28
1.6.3 Canada ...........................................................................30
1.6.4 India ...............................................................................32
1.6.5 Japan ..............................................................................34
1.6.6 Russia .............................................................................35
1.6.7 South Africa ...................................................................36
1.6.8 Switzerland ....................................................................38
1.6.9 USA................................................................................39
CHAPTER 2
Shareholders’ Role and Logic ....................................................... 47
2.1 ISSUES OF MEMBERSHIP AND CONTROLLING INTEREST
OVER MANAGEMENT ...............................................................48
2.1.1 Debate on Membership and Investors ..........................48
2.1.2 Winds of Change in Ownership ...................................50
2.1.3 Tussle for Control ..........................................................51
2.1.4 Concept of Corporate Voting Trust ...............................53
2.1.5 Role of Institutional Members in Corporate
Governance .................................................................55
2.2 MEETING AND MINUTES .............................................................58
2.2.1 Effect of Shareholder Meetings and Corporate
Governance .................................................................58
2.2.2 Use of Information Technology for Holding
of Meeting ..................................................................59
2.3 VARIOUS DISCLOSURE AND TRANSPARENCY REQUIREMENTS .............60
2.3.1 Disclosure to the Shareholders in General Meeting .....60
2.3.2 Non-finance Disclosure to Shareholders .......................62
2.3.3 Financial Discloser .........................................................68
2.3.4 Timely and Medium of Disclosure ...............................71
2.4 EXTRACTS ...................................................................................72
2.4.1 Australia .........................................................................72
2.4.2 Brazil ..............................................................................74
2.4.3 Canada ...........................................................................77
2.4.4 France .............................................................................78
2.4.5 Japan ..............................................................................82
2.4.6 Russia .............................................................................84
2.4.7 United Kingdom ...........................................................91
2.4.8 United States of America ...............................................96
CHAPTER 3
Board of Directors and its Control ............................................107
3.1 IMPORTANCE OF BOARD IN CORPORATE SYSTEM .......................... 108
3.1.1 Board as the Head Of Corporate
Organic Structure .................................................... 108
3.1.2 Power of the Board and Concentration of Wealth ..... 109
3.1.3 Power of the Board and the Rule of Law .................... 110
3.2 BOARD COMPOSITION AND COMMITTEE SYSTEM ......................... 113
3.2.1 Board Composition .................................................... 113
3.2.2 Committee System Within The Board ...................... 114
3.3 IMPACT OF DIFFERENT TYPES OF BOARD STRUCTURE IN
DIFFERENT COUNTRIES—A COMPARATIVE EXPERIENCE ............ 117
3.3.1 Unitary Board System ................................................. 117
3.3.2 Two Tier Board System ............................................... 118
3.3.3 Comparative Statement of Corporate Governance
In Unitary And Two Tier Board System .................. 120
3.4 DIRECTOR’S COMPENSATION ...................................................... 121
3.4.1 The Dilemma ............................................................. 121
3.4.2 Remuneration Policy .................................................. 122
3.4.3 Service Contracts And Compensation ........................ 122
3.5 INDEPENDENT DIRECTOR AND ROLE ......................................... 124
3.5.1 Who is the Independent Director .............................. 124
3.5.2 Appointment of an Independent Director ................. 128
3.5.3 Role of the Independent Director in Good
Governance .............................................................. 129
3.5.4 Controversy of the Independency of the
Independent Director ............................................. 131
3.5.5 Compensation of the Independent Director .............. 134
3.6 AUDIT COMMITTEE AND ITS ROLE ............................................ 135
3.6.1 Importance of the Audit Committee ......................... 135
3.6.2 Impact of Audit Committee in Good Governance .... 139
3.7 EXTRACTS ................................................................................ 140
3.7.1 Australia ...................................................................... 140
3.7.2 Brazil ........................................................................... 156
3.7.3 Canada ........................................................................ 160
3.7.4 France .......................................................................... 162
3.7.5 India ............................................................................ 182
3.7.6 Japan ........................................................................... 189
3.7.7 Russia .......................................................................... 194
3.7.8 Switzerland ................................................................. 200
3.7.9 UK .............................................................................. 203
3.7.10 United States .............................................................. 220
CHAPTER 4
Other Issues in the Corporate Governance................................253
4.1 ROLE OF CAPITAL MARKET REGULATOR IN ENFORCEMENT
OF CORPORATE GOVERNANCE ............................................... 253
4.1.1 Protection of Investor, Especially Small Investors ...... 254
4.1.2 Ensure the Markets are Fair, Efficient and
Transparent .............................................................. 255
4.1.3 Ensure The Reduction of Systematic Risk ................. 255
4.1.4 Ensure Legal Compliance ........................................... 256
4.1.5 Role of SRO in Corporate Governance ...................... 258
4.1.6 Importance of Listing Agreement In Corporate
Governance .............................................................. 260
PART II
Practice Area
5.1 AUSTRALIA CODE
Corporate Governance and the Listing Rules .............................265
5.2 CANADIAN CODE
Listing Agreement and Corporate Governance Rules ................267
5.3 GERMANY CODE
Listing Agreement and Corporate Governance Rules ................277
5.4 INDIAN CODE
Corporate Governance and Listing Rules ..................................291
5.5 JAPAN CODE
Corporate Governance and the Listing Rules .............................297
5.6 SWISS CODE
Best Practice for Corporate Governance ....................................301
5.7 UNITED KINGDOM
Disclosure Rules and Transparance Rules ..................................307
5.8 UNITED STATES OF AMERICA
Listing Agreement and Corporate Governance Rules
(NASDAQ)...........................................................................311
Index .................................................................................................... 349