Corporate Governance And Insider Trading

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CHAPTER I THE CONCEPT OF CORPORATE GOVERNANCE AND INSIDER TRADING This chapter shall deal with the concepts of corporate governance and insider trading, with explaining the development of the insider trading laws. It is essential to understand the concept of corporate governance first, in order to be able to understand the offence of insider trading in detail. Then the meaning and the concept of insider trading along with its evolution is explained subsequently in this chapter. 1.1 CORPORATE GOVERNANCE The SEBI has defined Corporate Governance as “Corporate governance is the acceptance by management of the inalienable rights of shareholders as the true owners of the corporation and of their own role as trustees on behalf of the…show more content…
The following things can be expected to be ensured by good corporate governance: • Effectual decision making by the management with proper disclosures necessary from time to time to accomplish the corporate objectives. • The business transactions are expected to be carried out transparently by the management. • All the statutory and legal obligations to be followed without any breach of the law. • Interest of all the stakeholders to be protected by the actions of the management. • The maintenance of ethical conduct and commitment to the values while carrying out the business transactions. In other words, corporate governance is the acceptance by management of the inalienable rights of shareholders as the true owners of the corporation and of their own role as trustees on behalf of the shareholders. It deals with conducting the affairs of a company such that there is fairness to all stakeholders and that its actions benefit the greatest number of stakeholders. In this regard, the management needs to prevent asymmetry of benefits between various sections of shareholders, especially between the owner, managers and the rest of the shareholders. A good Corporate Governance is integral to the very existence of a company and strengthens investor 's confidence by ensuring company 's commitment to higher growth and profits. Broadly, it seeks to achieve the following objectives: • A properly structured board capable of taking
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