While the top-100 listed entities seem to be doing better when it comes to meeting corporate governance targets, there are still some areas where they are lagging behind.

According to the third edition of Excellence Enablers’ Survey on Corporate Governance, 40 companies have given only an email id for whistleblowers. Of these, 8 are general email ids. While 41 have given an address, of these, 32 are company addresses, and 9 are personal addresses. Only 21 have given an email id and an address of the Chair of Audit Committee. Excellence Enablers is backed by former SEBI Chairman M Damodaran.

“The Whistleblower mechanism, also known as the Vigil Mechanism, is a facility available to persons to bring matters to the attention of senior/top management, without revealing their identity. Having such a mechanism is not enough. How much is revealed in the annual reports by way of the manner of resolution of complaints, the punishment meted out, the constitution and functioning of the internal committees and the campaign undertaken to sensitise the workforce, will set apart companies which take this exercise seriously, from those that are going through the motions, with regard to such complaints,” the report said.

Familiarisation programmes

Familiarisation programmes are another area where companies are found short of expectation. “These programmes are very important to ensure that Directors are updated in regard to both domain knowledge as well the environment in which the company operates. Therefore, far more attention needs to be given to this matter by the top management. It will be helpful if the regulator clearly indicates the kind of programmes or interactions which will not qualify as familiarisation programmes. This is necessary because many companies pass off Board agenda items and presentations as familiarisation programmes,” the report stated.

This is an area where some confusion persists regarding the content of the familiarisation programme. Taking advantage of this, some companies have included even interaction with key managerial persons as a familiarisation programme for the Directors. In FY20 and FY21, 1 PSU did not conduct any programme, and another PSU did not give the details on the website. In FY22, eight companies, including 2 PSUs, did not provide the details related to the programme on their respective websites.

Some of the other risks which stand out in the past four financial years are lack of succession planning, absence of business continuity plan, inadequate HR/talent management, geopolitical risks, human rights, diversity and inclusion, business ethics and integrity, fraud, IPR, Research and Development, risk associated with subsidiaries, and promoters.

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