Workshop Report
Mr. Aggarwal pointed out that the Act has brought about a sea change in the way boards and managements perceive their roles and functions. The Securities Exchange Commission (SEC) has sharpened the rules of the game demanding greater disclosure and accountability on the part of Board of Directors. The Corporate Fraud Accountability Act has included new offences like deliberate destruction, falsification of documents with the intent to impede, obstruct etc., of investigation. The penalty for such offence is imprisonment unto twenty years. The Public Company Accounting Oversight Board has been established to oversee the audits of public companies. There is a new trend on maintaining strict professional relationship between the auditors and companies. The Act has tightened the provisions of audit committee composition. The Board and Audit Committee now comprise substantial majority of independent directors. The certification and signing of undertakings by the CEO and CFO of the company now ensure greater accountability. There is apparent trend of preventing economic crimes by encouraging 'whistle blowing system' by multinational companies. They are providing a forum for employees to report what they reasonably believe is a federal securities violation.
Reputed companies have their code of ethics and social responsibilities and provide detailed information of discharging responsibilities as good citizens. Mr. Nitin suggested that in the light of the experience of the Act in the US, further reforms should be introduced in India for achieving corporate excellence and accountability. A good beginning has been made by introducing the Companies (Amendment) Bill, 2003, containing significant provisions for greater disclosure and responsibility of the Board Directors.
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