1. Corporate Governance in UK “The effectiveness with which boards discharge their responsibilities determines Britain's competitive position. They must be free to drive their companies forward, but exercise that freedom within a framework of effective accountability. This is the essence of any system of good corporate governance". - Cadbury Report Nitin Yadav Shewta Harsh Mangal Anubhava Prabhujeet Singh

2. Agenda Background Code of Best Practice Compliance Strength of UK Model

3. Origins in a series of corporate scandals in the late-1980s and early-1990s Collapse of BCCI bank, Polly Peck, and the Robert Maxwell pension fund. 1991 - the Committee on the Financial Aspects of Corporate Governance, chaired by Sir Adrian Cadbury. 1992 - Cadbury Report. 1995 - Greenbury Report set out recommendations on the remuneration of directors. In 1998 - Combined Code (Cadbury and Greenbury) 2003 - Combined Code was updated (Higgs Report and Smith Report - Following the Enron and WorldCom scandals in the US) 2003 - the UK Government announced that the Financial Reporting Council (FRC) was to assume responsibility for publishing and maintaining the Code. 2006 and 2008 - The FRC made further limited changes to the Code. Background

4. Code of Best Practice - DIRECTORS Effective board Clear division of responsibilities between the running of the board and the executive responsibility for the running of the company’s business. (Chairman & CEO) Balance of executive and non-executive directors such that no small group can dominate the board’s decision taking. Formal, rigorous and transparent procedure for the appointment of new directors The board should be supplied in a timely manner with appropriate information All directors should receive induction Formal and rigorous annual evaluation of its performance and that of its committees and individual directors. All directors should be submitted for re-election at regular intervals

5. Remuneration should be sufficient to attract, retain and motivate directors of the quality required Remuneration should be structured so as to link rewards to corporate and individual performance. Formal and transparent procedure for developing policy on executive remuneration No director should be involved in deciding his or her own remuneration. Code of Best Practice - REMUNERATION

6. Balanced and understandable assessment of the company’s position and prospects. The board should maintain a sound system of internal control Maintaining an appropriate relationship with the company’s auditors. Code of Best Practice - ACCOUNTABILITY AND AUDIT

7. There should be a dialogue with shareholders based on the mutual understanding of objectives. The board should use the AGM to communicate with investors and to encourage their participation. Code of Best Practice - RELATIONS WITH SHAREHOLDERS

8. These principles of best practice are not defined by company law, but arise from the Combined Code. Soft law - i.e. a non-binding code of conduct to be monitored and enforced by shareholders. Advantage of such a soft law approach - flexibility in their choice of corporate governance processes Flexibility is likely to exert a positive impact on company performance, as governance needs differ from company to company Governance should promote both accountability to shareholders and the board's ability to manage the company effectively. This fusion of roles is encapsulated in the notion of the unitary board, which is both the “pilot” and the “watchman” of the company. The key features of UK best practice

9. Compliance

10. The strength of the UK model The UK has placed greater reliance on institutional shareholders to enforce high standards of corporate behavior. A key strength of the UK approach to corporate governance is its ability to deliver high standards of corporate governance with relatively low associated costs.