Business Ethics and Corporate Governance, Second Edition

CEOS ACCOUNTABLE FOR COMPANIES’ RISK SYSTEMS

Inspired by Sarbanes-Oxley Act, Clause 49 of listing agreement was scheduled to come into effect from 1 April 2005. However, bowing to general demand from corporates, SEBI decided in its board meet held on 23 March 2005, to defer the implementation of Clause 49 till 31 December to provide listed entities, including public sector companies, time to appoint adequate number of independent directors and comply with norms. No special concession is to be extended to state-owned enterprises which demanded exemption on this issue. SEBI felt that PSUs are not to be looked upon as special class of companies.

Under the new provisions, chief executive officers (CEOs) and chief financial officers (CFOs) in the ...