The National Stock Exchange (NSE) launched NSE Prime on Tuesday, a platform for companies that follow higher standards of corporate governance among listed companies. The listed companies can voluntarily choose to be part of NSE Prime and will further need to comply with pre-defined norms on an ongoing basis which will be monitored by NSE, the exchange said on Tuesday.
The initiative aims at strengthening the independence of boards, independent directors, and auditors. It further aims to remove or mitigate conflict of interest situations and strengthen/standardise financial disclosures, said NSE. Speaking on the initiative, Uday Kotak, MD and CEO, Kotak Mahindra Bank, said: “Corporate governance is a subject of intense debate both globally and in India. Proper governance supports entrepreneurship and professionalism in a firm and gives confidence to a wide variety of investors — that the interest of all stakeholders is taken care of. Corporates need to be able to build their strategic guardrails along with transparency on how they operate.”
He further added that there was a need to ensure the best of governance standards be put in place and that good governance would lead to superior performance for companies in the listed space. “NSE’s step is in the right direction and it will help attract more capital both domestically and globally, for companies in India,” Kotak said.
The initiative will further raise the bar for corporate governance standards in India, enable investors to identify companies that have voluntarily signed up for higher standards of corporate governance, broaden the quality of investors in listed companies and further strengthen trust in the Indian capital markets.
“Improved corporate governance standards, greater transparency, and better disclosures will help companies build stronger and sustainable businesses that can stand the test of time. This will not only help companies and investors but also accelerate market development at large,” said Vikram Limaye, MD and CEO, NSE.