All listed companies have an obligation towards an effective corporate governance framework. One of its key tenets is that these companies should provide all important information related to the company, including aspects directly or indirectly affecting the business, in a timely manner.
The key words are all important and timely. An information is considered important if non-disclosure of that affects, directly or indirectly, stakeholders' decision-making. Stakeholders include employees, suppliers, lenders and shareholders; and all those who have a business-relationship with the company; they include potential investors as well for this is what a listed company has asked for to begin with. Needless to say that any disclosure is meaningless if not made on a timely manner.
Does it really matter if some of such information disclosure is not mandated by the regulation? It is the moral obligation of the board and management to provide information which otherwise they would have expected if the positions were switched.
Yet, it is not surprising to see companies world-over hiding and/or delaying/manipulating information to the stakeholders. They either breach the regulation or blame it on the regulation. This is true not only in India but everywhere - it is the same human breed.
To test this aspect of corporate governance, pick any annual report, quarterly report or corporate announcement and see if the information is sufficient for you as an investor for your analysis; see if this information is timely or should have been provided to you much earlier.
The regulation (the companies act, the SEBI, the stock exchanges, the accounting rules and the like) provides some minimum rules regarding information disclosure. It is not sure, however, whether it is both sufficient and timely.
Take for example, quarterly reporting from companies. All they throw is some information regarding revenue, costs and profit or loss. Is that sufficient? Don't you think as investors we need a full set of financial information including the balance sheet, income statement, cash flows, changes in equity and key events during the quarter? To get to know of information related to cash, new loan, acquisition or equity, we have to wait until the year-end annual report. Isn't this ridiculous?
Whatever happened to the shareholders' rights?
What sort of governance is this - both from the board and the regulation? If the regulation does not provide for this, a responsible board should voluntarily supply; if the board does not supply, the regulation should wake up and mandate it.
Is this asking for too much?
The key words are all important and timely. An information is considered important if non-disclosure of that affects, directly or indirectly, stakeholders' decision-making. Stakeholders include employees, suppliers, lenders and shareholders; and all those who have a business-relationship with the company; they include potential investors as well for this is what a listed company has asked for to begin with. Needless to say that any disclosure is meaningless if not made on a timely manner.
Does it really matter if some of such information disclosure is not mandated by the regulation? It is the moral obligation of the board and management to provide information which otherwise they would have expected if the positions were switched.
Yet, it is not surprising to see companies world-over hiding and/or delaying/manipulating information to the stakeholders. They either breach the regulation or blame it on the regulation. This is true not only in India but everywhere - it is the same human breed.
To test this aspect of corporate governance, pick any annual report, quarterly report or corporate announcement and see if the information is sufficient for you as an investor for your analysis; see if this information is timely or should have been provided to you much earlier.
The regulation (the companies act, the SEBI, the stock exchanges, the accounting rules and the like) provides some minimum rules regarding information disclosure. It is not sure, however, whether it is both sufficient and timely.
Take for example, quarterly reporting from companies. All they throw is some information regarding revenue, costs and profit or loss. Is that sufficient? Don't you think as investors we need a full set of financial information including the balance sheet, income statement, cash flows, changes in equity and key events during the quarter? To get to know of information related to cash, new loan, acquisition or equity, we have to wait until the year-end annual report. Isn't this ridiculous?
Whatever happened to the shareholders' rights?
What sort of governance is this - both from the board and the regulation? If the regulation does not provide for this, a responsible board should voluntarily supply; if the board does not supply, the regulation should wake up and mandate it.
Is this asking for too much?
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