India unveils corporate governance guidelines

A new set of voluntary guidelines on corporate governance has been published by the Indian government.

Issued at the same time as fresh proposals on the regulation of corporate social responsibility, the guidelines are expected to become mandatory for businesses after a period of fine-tuning, the IANS news agency reports.

Corporate affairs minister Salman Khurshid explained: "The existing set of corporate governance guidelines needed to be taken to a higher level and hence we came up with these."

The new proposals recommend the creation of an audit committee comprised of non-executive and independent directors, as well as specifying that no more than ten per cent of audit revenues should come from a single client or group.

In addition, the guidelines feature new information on the structure of compensation for non-executive directors and state that auditors should be rotated every six years.

Meanwhile, an article in the Financial Express has questioned the wisdom of enforcing a single code of corporate governance across a diverse range of companies.

"Corporations vary and are too diverse for one rule to be universally applicable," writer Satvik Varma suggests.