committees of the board

7/28/2019 Committees of the BOARD

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Session 10Date 1st March, 2013


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Board relies on independent outside

directors to monitor management

performance.


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Audit Committee

Remuneration Committee

Nomination Committee

Strategy Committee

Risk Management Committee

Management committee

Finance committeeScience committee


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Oversight of the finance function and

monitoring

Relies on the senior financial management

and the outside auditors.


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A qualifies and independent audit

committee should be set up by the board

of a Company. This would go a long way in

enhancing the credibility of the financial

disclosures of a Company and promoting

transparency


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Minimum of 3 members ( non executivedirectors, majority being independent and with atleast one director having financial and

accounting knowledge) The chairman of the committee should be anindependent director.

The Chairman should be present at AGM toanswer shareholder queries.

The Company Secretary should act as theSecretary to the Committee

( the above are mandatory recommendations)


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Committees are the link between the board

and external auditors

This committee looks into all the matters

raised by external auditors relating to

management systems and tries to resolve

any obligations that the auditors raise

about the published financial accounts


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To discuss with independent directors anyproblem that they experience in completingthe audit

To review the interim and final accounts intoto.To inform the board about the effectiveness

of:

Internal controls and quality of financial reporting aspointed out by independent directors

To make recommendations regarding the audit fee,selection and replacement of auditors.


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Reviewing with management the annual

financial statements before submission to

the board

Reviewing the adequacy of internal audit

function, including structure of internal

audit department, staffing and seniority of

the official heading department, reportingstructure, coverage and frequency of

internal audit.


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Discussion with internal auditors of any

significant findings and follow- up thereon

Reviewing the findings of any internal

auditors into matters where there is

suspected fraud or irregularity or a failure

of internal control systems of a material

nature and reporting the matter to theboard


11/24

Discussion with the external auditors beforethe audit commences , of the nature andscope of audit . Also post-audit discussion to

ascertain any area of concernReviewing the companys financial and risk

management policiesLooking into reasons for substantial defaults

in the payments to the depositors, debentureholders, shareholder and creditors


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Meet at least thrice a year

One meeting before finalization and one

every 6 months

Quorum should be either 2 members or

1/3rd of the members of the audit

committee whichever is higher and there

should be a minimum of two independentdirectors.

( this is a mandatory recommendation


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To investigate any activity within its terms

of reference

To seek information from any employee

To obtain outside legal or other

professional advice

To secure services of outsiders with

relevant expertise( this is a mandatory recommendation)


14/24

Shareholders are more concerned about

the lack of transparency regarding

remuneration of directors and top level

managers

The boards set ups the committee to

objectively review the package of the

directors and top level mangers


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The Board of Directors should decide the remunerationof the non-executive

The annual report must contain :- all elements of the remuneration

package of all the directors- Details of fixed component andperformance linked incentives

- Service contracts, notice period, severancefees

- Stock option details, if any

( this is a mandatory recommendation)


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It chalks out remuneration policy ( checks

out unreasonable increase in executive

compensation.

Designs a transparent remuneration policy

that can attract and retain directors and top

management and motivate them to

achieve the long-term goals of theorganization.


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To select the non-executive directors.

Generally, it is headed by the chairman

and it shortlists and interviews the final

candidates.


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Risk refers to the uncertainty that surroundsfuture events and outcomes. It is theexpression of the likelihood and impact of anevent with the potential to influence the

achievement of an organization's objectives.

Risk Management is a systematic approachto setting the best course of action under

uncertainty by identifying, assessing,understanding, acting on and communicatingrisk issues


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Setting the tone from the top that systematicand integrated risk management is valuablefor understanding uncertainty in decision-making and for demonstrating accountability

to stakeholders;

determining the best way to implement theIntegrated Risk Management Framework;

ensuring that a supportive learningenvironment exists for risk management,including sensible risk taking and learningfrom experience;


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ensuring that risks are prioritized, and thatappropriate risk management strategiesare in place to respond to identified risks;and

ensuring the capacity to report on theperformance of the risk managementfunction


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Terms of reference of management

committee include business strategies and

policies, M & A proposal, medium and

short term plans, approving policies,

process and practice relating to HR,

Succession planning for senior manager,

to name a few.


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Include:Review of capital structureDistribution policies

Financial policiesAccounting standardsSystems and controls covering accounting

treasuryTaxationForexAnd insurance


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Will include

Review and approving area of research

Org structure

Policies and process for R and D

to name a few


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THANK YOU!

committees of the board

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