Sources said since most of the Indian corporates are governed by families, in case of the death of one generation, it becomes difficult for the company or board to ensure proper governance in respect of succession. The duties and responsibilities of board members and the role of independent directors in this regard will also be spelt out clearly, sources said.

The committee, which will submit its final report in a couple of weeks, is also likely to insist on proper disclosure and frame norms governing inter-corporate crossholdings. The committee was silent on these two issues in its draft report submitted to the Securities and Exchanges Board of India. The committee is likely to reconsider the earlier recommendation that institutional investors should maintain an arms length relationship with the companyand not seek board participation. It has been felt that divesting the role of financial institution's nominees on the boards would have far reaching ramifications and may prove to be counter-productive.

The nominee directors need to take play a much active role and take interest in ensuring good corporate governance by large investors.

The committee is also expected to give stress on deterrents or surveillance systems so that proper monitoring of adherence to its recommendations can be done.

It is believed that the issue of crossholdings is also being looked into as it works against public shareholders. A need to have proper disclosure and norms governing these crossholdings was also felt.

A number of corporates have been using funds raised from public for diverting it into other corporates, including those in which they are shareholders of investing corporates.

Similarly, the Institute of Chartered Accountants of India (ICAI) panel on corporate governance under the chairmanship of Vinod Jain, hascalled for outlining a broad active role and responsibility of various bodies in the interest of investors and public.

Companies having a capital of Rs 10 crore and above or a net worth of over Rs 25 crore will have to adopt the code by April 2000. Companies with an equity base of Rs 5 crore will have to adopt the code by 2001. However, recently industry chambers have described the draft recommendations too stiff and felt that a large number of smaller companies may not be able to adopt the recommendations.