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The Sarbanes-Oxley Act of 2002 is a federal law that established sweeping auditing and financial regulations for public companies. Lawmakers created the legislation to help protect shareholders, employees and the public from accounting errors and fraudulent financial practices. Auditors, accountants and corporate officers became accountable for the new set of rules. These rules were amendments and additions to several laws enforced by the Securities and Exchange Commission ( SEC ), including the Securities and Exchange Act of 1934 and the Investment Advisers Act of 1940. The SEC enforces the Sarbanes-Oxley Act. The main areas that the Act is focused on are: Increasing criminal punishment Accounting regulation New protections Corporate responsibility The Act primarily sought to regulate financial reporting, internal audits and other business practices at publicly traded companies. However, some provisions apply to all enterprises, including private companies and nonprofit organizations....

The Organization of Economic Cooperation and Development (OECD) released its first set of corporate governance principles in 1999. A revised version was then released in 2004. The principles were developed and endorsed by the ministers of OECD member countries in order to help OECD and Non-OECD governments in their efforts to create legal and regulatory frameworks for corporate governance in their countries. The six OECD Principles are: Ensuring the basis of an effective corporate governance framework The rights of shareholders and key ownership functions The equitable treatment of shareholders The role of stakeholders in corporate governance Disclosure and transparency The responsibilities of the board 1.Ensure the basis of an effective corporate governance framework The corporate governance framework should promote transparent and efficient markets, be consistent with the rule of law and clearly articulate the division of responsibilities among different supervisory, regulatory and e...

  In December 1992, the Cadbury Committee published their Code of Best Practice. The recommendations, which largely reflected perceived best practice at the time, included separating the roles of CEO and chairman, having a minimum of three non‐executive directors on the board and the formulation of audit committees. The Code also advocated that a more active role be taken by institutional investors in the promotion of good practice in corporate governance. This paper discusses how agency problems may be (partially) resolved by corporate governance, reviews the evidence on compliance with the Cadbury Code and examines the relationship between board structure and firm performance, looking for evidence that the Code has enhanced board performance. While there is no empirical evidence of an association between board structure and firm value, there is some evidence that compliance with the Cadbury recommendations enhances board oversight with respect to the manipulation of accounting nu...

  History- The Regional Rural Banks were established on the recommendations of Narsimha Committee on Rural Credit.  The committee was of the view that RRBs would be much better suited than the commercial banks or Co-Operative Banks in meeting the needs of rural areas. Considering the recommendations of the committee the Government of India passed Regional Rural Banks Act 1976.  After passing the Act within a year at least 25 RRBs were established in different parts of India. The Regional Rural Banks were established with a view to develop such types of banking institutions which could function as a commercial organization in rural areas. The Regional Rural Banks Act 1976 provide for incorporation, regulation and winding up Regional Rural Banks with a view to developing the rural economy by providing for the purpose of development of Agriculture, Trade, Commerce, Industry and other productive activities in the rural areas, credit and other facilities, particularly to the s...

The Banking Regulation Act, 1949 is a legislation in India that regulates all banking firms in India passed as the Banking Companies Act 1949, it came into force from 16 March 1949 and changed to Banking Regulation Act 1949 from 1 March 1966. Initially, the law was applicable only to banking companies. But, 1965 it was amended to make it applicable to cooperative banks and to introduce other changes.  In 2020 it was amended to bring the cooperative banks under the supervision of the Reserve Bank of India . Overview The Act provides a framework under which commercial banking in India is supervised and regulated. The Act supplements the Companies Act, 1956 Primary Agricultural Credit Society and cooperative land mortgage banks are excluded from the Act The Act gives the Reserve Bank of India (RBI) the power to license banks, have regulation over shareholding and voting rights of shareholders; supervise the appointment of the boards and management; regulate the operations of banks...

  Corporate governance is needed for the following reasons: 1. Separation of Ownership from Management: A company is run by its managers. Corporate governance ensures that managers work in the best interests of corporate owners (shareholders). 2. Global Capital: In today’s global world, global capital flows in markets which are well regulated and have high standards of efficiency and transparency. Good corporate governance gains credibility and trust of global market players. 3. Investor Protection: Investors are educated and enlightened of their rights. They want their rights to be protected by companies in which they have invested money. Corporate governance is an important tool that protects investors’ interests by improving efficiency of corporate enterprises. 4. Foreign Investments: Significant foreign institutional investment is taking place in India. These investors expect companies to adopt globally acceptable practices of corporate governance and well-developed capital mar...

Corporate governance is important for the following reasons: 1. It shapes the growth and future of capital markets of the economy. 2. It helps in raising adequate funds from capital markets. 3. It links the company's management system with its financial reporting system. 4. It enables management to take innovative decisions for effective functioning of an enterprise within the legal framework of accountability. 5. It supports investors by making corporate accounting practices transparent. Corporate enterprises have to disclose financial reporting structures. 6. It provides adequate and timely disclosure, reporting requirements, code of conduct etc. Companies present material price sensitive information to outsiders and ensure that till the time this information is made public, insiders abstain from dealing in corporate securities. It, thus, avoids insider trading. 7. It improves efficiency and effectiveness of an enterprise and adds to material wealth of the economy. 8. It improves...