Major Corporate Governance Initiatives in India

Beyond the committees, the Government of India and regulators have launched specific initiatives to enforce governance.

Key Initiatives

1. National Financial Reporting Authority (NFRA)

• Context: Before NFRA, the ICAI (Institute of Chartered Accountants) regulated auditors. It was seen as lenient.
• Role: NFRA is an independent super-regulator that can punish auditors of large listed companies.

2. Investor Education and Protection Fund (IEPF)

• Purpose: If you forget to claim your dividends for 7 years, the money goes here.
• Role: Uses the money to educate investors and prevent fraud.

3. MCA21 (Ministry of Corporate Affairs)

• Success Story: One of the best e-governance projects.
• Impact: You can download the balance sheet of ANY registered company in India for Rs. 100. This transparency deters fraud.

4. Stewardship Code (SEBI)

• For: Mutual Funds and Insurance Companies (LIC).
• Rule: They can no longer be passive. They MUST attend shareholder meetings and vote against bad management decisions.