Page 29 - Banking Finance October 2020

ARTICLE

Governance is the prevalence of Family businesses where an education trust (belonging to an influential person of the
promoters are the dominant shareholders. These dominant state) with the intent to seek a favourable reply to
shareholders can indulge in related party transaction within company's application for mining rights.
the group companies and issue shares on preferential basis.
A few studies have shown that independent directors merely So we can see that despite having so many laws, rules,
act hands in glove with the management and are actually regulations, guidelines, regulatory bodies which enforce the
ineffective. They do not serve the purpose for which they Corporate Governance, fraudsters still find ways to
are appointed. circumvent the system. However it is no time to stand still
but actually think one step ahead of these crooked persons
Till very recently, in a number of cases the post of CEO and to ensure the integrity of the system. We have to time and
Chairman of the board were filled by the same person which again emphasize upon the need to be proactive with regards
compromised the supervisory role of the Chairman. to formation of rules and regulation of corporate
However now, SEBI has directed that the post of CEO and governance.
Chairman of the board have to be filled by separate person.
This essentially means that Chairman has to be a non Conclusion:
executive director. (The implementation of this guideline has Corporate governance is vital cog in instilling the confidence
been deferred as of now). in investors regarding the functioning of a company. It is of
paramount importance especially in a globalized world. In
Examples of Corporate Mis-governance: India, a number of institutes/ bodies are involved in ensuring
A leading drug manufacturer of India indulged in wrong the corporate governance. A number of steps have already
practices. It fudged the data related to regulatory filings, been taken and more needs to be done to ensure that
sold adulterated drugs. All this happened despite having an corporate governance in India matches global standards.
illustrious board at the helm of affairs.
References
The star chairman of a leading technology company www.taxguru.in
manipulated accounts to the tune of 14,000+ Crore rupees www.blogs.cfainstitute.org/
with the active connivance of auditors and others. www.moneycontrol.com
www.dsij.in
A large steel company in southern India made donations to www.cleartax.in. T

Google plans to pay publishers $1 billion over 3 years for their news

Alphabet's Google plans to pay $1 billion to publishers globally for their news over the next three years, its CEO said,
a step that could help it win over a powerful group amid heightened regulatory scrutiny worldwide. News publishers
have long fought the world's most popular internet search engine for compensation for using their content, with
European media groups leading the charge.
CEO Sundar Pichai said the new product called Google News Showcase will launch first in Germany, where it has signed
up German newspapers including Der Spiegel, Stern, Die Zeit, and in Brazil with Folha de S.Paulo, Band and Infobae.
It will be rolled out in Belgium, India, the Netherlands and other countries. About 200 publishers in Argentina, Austra-
lia, Britain, Brazil, Canada and Germany have signed up to the product. "This financial commitment - our biggest to
date - will pay publishers to create and curate high-quality content for a different kind of online news experience,"
Pichai said. German publisher the Spiegel Group welcomed the project.
The European Publishers Council (EPC), whose members include News UK, the Guardian, Pearson, the New York Times
and Schibsted, however, was critical. "By launching a product, they (Google) can dictate terms and conditions, under-
mine legislation designed to create conditions for a fair negotiation, while claiming they are helping to fund news
production," said EPC Executive Director Angela Mills Wade.

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