The company should be certified by accountants or business secretaries practising on compliance with corporate governance, and this certificate should also be attached to the Directors` report. The non-compulsory requirements listed in Schedule VIII of Term 49 can be implemented by the company. If we compare this new amended clause to the previous clause of the Companies Act 1956, we will find that this new clause is intended to increase transparency and preserve the interest of stakeholders, given that a new detailed provision of the independent director has been inserted, that the role of the audit committee has been improved, etc. The coercion of at least one women`s director is that the Ministry of Women`s Empowerment is working. The main reason for this clause is that the company should be fair to its stakeholders. Everything in the business must be done efficiently and fairly. Because stakeholders have a social and financial interest in the business, the company is required to protect its interests. Section 49 of the Listing Agreement deals with comprehensive corporate governance guidelines. Below are the provisions of a company that must comply with the implementation of effective corporate governance.

The term « clause 49 » refers to clause 49 of the listing agreement between a company and the exchanges on which it is listed (the listing agreement is the same for all Indian exchanges, including the NSE and the BSE). This clause is a recent addition to the Listing Agreement and was not inserted until 2000 following the recommendations of the Kumarmangalam Birla Committee on Corporate Governance, established in 1999 by the Securities Exchange Board of India (SEBI). Apart from the remuneration of the seats/directors, it has no material financial relationship with companies, holding companies, subcontractors or partners or their promoters/directors during the current year and in the previous two years. The revised term 49 applies to publicly traded companies in accordance with the above implementation plan. However, for other listed companies that are not corporations, but entities governed by other statutes, revised section 49 applies to the extent that it does not violate their respective statutes and directives of the relevant regulatory authorities. The revised Term 49 also does not apply to mutual funds. Sebi listed paragraph 49 of the Equity Listing Agreement (2000), which now serves as the standard for corporate governance in India, as an important measure for codifying corporate governance standards. Section 49 gave rise to the requirement that half of the directors of the board of directors of a publicly traded company be independent directors.

In the same clause, SEBI had proposed the powers of the audit committee, which had to have a majority of independent directors. « Corporate governance aims to maintain a balance between economic and social objectives as well as individual and local objectives. The governance framework is intended to promote the efficient use of resources and to require responsibility for the management of these resources. The aim is to coordinate the best interests of individuals, businesses and society. -Sir Adrian Cadbury, UK, Commission Report: Corporate Governance 1992 The fundamental criterion on which the entire list of agreements is based is corporate governance. Currently, there are 54 clauses in the list agreement and all on the basis of that concept. In addition, there is a clause dealing specifically with corporate governance, namely: Clause 49. Listing involves the admission of securities to trading on a recognized exchange. Securities can be limited companies, central or state governments, quasi-state institutions and other financial institutions/capital companies, municipalities, etc.

The main objectives of the listing are: – the provision of liquidity to the securities; Mobilizing savings for economic development; Protect the interests of investors by ensuring full disclosure.