Corporate Governance Charter for Start-Ups released by Confederation of Indian Industry (CII)

Posted 29 Apr 2024

2 min read

Corporate Governance is a dynamic set of value driven principles and measures which steers an organization’s development in the right direction.
- It is based on the principles like Transparency, Fairness, Accountability etc.
The charter has been released in the backdrop of significant erosion in shareholders’ value in Indian Startups due to governance failure in many high-profile Start-ups in the recent time.
- E.g. BharatPe, GoMechanic etc.

Key Highlights of the Charter
- Objective: It will serve as a self-governing code for Startups (incorporated under the Companies Act, 2013).
  - It will help start-ups in not only adding value but also in achieving stability, growth, resilience, competitiveness and long-term success.
- Guidelines for different stages of Start-ups: These include Inception Stage, Progression Stage, Growth Stage and Going Public Stage.
  - For instance, it provides clear definition of role and responsibilities of members of the Board, directors etc. in Progression Stage.
- Online Self Evaluative Governance Scorecard- It can be used to measure their current governance status and improvement over time.

The Companies Act, 2013 together with the Companies Rules provide a robust framework for Corporate Governance
The Securities and Exchange Board of India monitors corporate governance of listed companies.
National Foundation for Corporate Governance set up by the Ministry of Corporate Affairs.

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