Calicut University Corporate Regulations Chapter 4 Exam Oriented Revision

Summary

This video script covers key concepts in corporate governance, focusing on Corporate Social Responsibility (CSR), the role of SEBI (Securities and Exchange Board of India), and the Securities Appellate Tribunal (SAT). It explains how CSR allows companies to give back to society through various initiatives, such as education and healthcare. SEBI regulates stock markets in India, ensuring fairness and transparency, while SAT handles appeals against SEBI decisions. Additionally, the script highlights the importance of directors' roles and responsibilities in corporate governance, ensuring ethical and legal business practices.

Takeaways

• 😀 CSR (Corporate Social Responsibility) is a duty for companies to give back to society, addressing social, environmental, and economic impacts.
• 😀 CSR activities can include educational support, health care initiatives, environmental conservation, and community development programs.
• 😀 SEBI (Securities and Exchange Board of India) is responsible for regulating and managing stock markets in India to ensure fairness and transparency.
• 😀 SEBI works to prevent market manipulation, insider trading, and other unfair practices in stock trading.
• 😀 SEBI is structured with a chairman and members appointed from different sectors, including the Ministry of Finance and RBI, to ensure effective functioning.
• 😀 SAT (Securities Appellate Tribunal) is an appellate body for appeals against SEBI’s decisions and has the authority to modify or overturn them.
• 😀 SAT’s decisions can be further challenged in the Supreme Court of India, ensuring accountability and fairness in regulatory matters.
• 😀 Corporate governance involves understanding the roles and responsibilities of directors, such as Managing Directors, CEOs, and independent directors, within a company.
• 😀 Directors have specific duties and liabilities, and corporate governance ensures the smooth and ethical operation of the company.
• 😀 The distinction between various types of directors (independent, full-time) and their roles in the company's functioning is crucial to effective governance.
• 😀 Understanding regulatory bodies like SEBI and SAT is essential for maintaining transparency, investor protection, and the proper functioning of financial markets.

Q & A

What is Corporate Social Responsibility (CSR) and why is it important for companies?

Corporate Social Responsibility (CSR) refers to a company's voluntary efforts to improve its social, environmental, and economic impact. It is important because companies operate within a society and must give back to it, contributing to its overall development. CSR activities can include education, healthcare, environmental conservation, and community development.

What are some common CSR activities companies can engage in?

Common CSR activities include supporting education by providing books and bags to students, initiating healthcare programs, promoting environmental conservation, and running community development initiatives. These activities aim to enhance the welfare of society.

What role does the Securities and Exchange Board of India (SEBI) play in the securities market?

SEBI is the regulatory authority responsible for overseeing and regulating India’s securities market. It ensures fairness, prevents market manipulations, controls insider trading, and protects investors' interests. SEBI's role is crucial in maintaining the integrity of the financial market.

What powers and objectives does SEBI have?

SEBI's primary objectives are to regulate stock exchanges, promote fair trading practices, protect investors' interests, and educate them about investing. It also has the power to supervise intermediaries like brokers and take action against unfair trading practices.

What is the Securities Appellate Tribunal (SAT) and how does it relate to SEBI?

The Securities Appellate Tribunal (SAT) is a body that hears appeals against decisions made by SEBI. If a person disagrees with SEBI's decision, they can approach SAT for a review. SAT has the authority to modify or uphold SEBI's decisions, and in certain cases, its rulings can be contested in the Supreme Court of India.

What are the responsibilities of directors in a company, and how are they differentiated?

Directors in a company, including the Managing Director, CEO, CFO, and independent directors, have distinct responsibilities. The Managing Director oversees the company's operations, the CEO is responsible for strategic decisions, the CFO handles financial matters, and independent directors provide objective views on corporate governance. Their roles and powers are clearly defined to ensure smooth corporate functioning.

How does SEBI regulate stock exchanges and intermediaries?

SEBI regulates stock exchanges and intermediaries, including brokers, to ensure they operate in a fair and transparent manner. It oversees their activities, sets rules for conduct, and takes action against any violations to protect the interests of investors and maintain market integrity.

Why is investor education promoted by SEBI, and how does it contribute to market fairness?

Investor education is crucial for ensuring that individuals make informed investment decisions. SEBI promotes investor education to empower people with the knowledge to avoid scams and make sound financial choices, thus contributing to a fair and transparent market environment.

What is the significance of the concept of 'fair dealing' in the securities market?

Fair dealing refers to the ethical and legal conduct of transactions in the securities market. SEBI aims to eliminate unfair practices such as insider trading and market manipulation. Ensuring fair dealing is essential for maintaining investor trust and the overall integrity of the financial system.

How can an individual challenge a decision made by SEBI?

An individual can challenge a decision made by SEBI by appealing to the Securities Appellate Tribunal (SAT). If the individual is dissatisfied with SAT's decision, they can further appeal to the Supreme Court of India. This process ensures that SEBI's decisions are fair and subject to judicial review.