SEBI Chairman Calls on Corporates to Elevate Governance Standards
Click to start listening
Synopsis
On April 17, SEBI Chairman Tuhin Kanta Pandey urged corporates to enhance governance standards to prevent market disruptions. He stressed the importance of internal changes within corporate boardrooms while advocating for technology adoption in compliance processes.
Key Takeaways
- Importance of high governance standards for corporates.
- Need for internal transformation in corporate boardrooms.
- Mandatory periodic disclosures to ensure transparency.
- Adoption of Reg Tech solutions to improve compliance.
- Balancing regulation with ease of doing business.
Mumbai, April 17 (NationPress) SEBI Chairman Tuhin Kanta Pandey emphasized on Thursday that corporates need to uphold high governance standards as any shortcomings could initiate ripple effects throughout the market economy.
Speaking at the CII Corporate Governance Summit in Mumbai, the head of the market regulator stated that preventing failures in corporate governance is crucial for preserving financial stability.
He underscored that the SEBI will persist in demanding elevated governance standards, but authentic and sustainable transformation must originate from the corporate boardrooms.
Pandey pointed out that to promote transparency in the market, the SEBI has mandated periodic disclosures of specific information, including quarterly updates on shareholding patterns, compliance with corporate governance standards, financial results, and fund movements.
"By enforcing disclosures, board structures, and oversight mechanisms, we aim to foster a self-regulating environment that promotes ethical and responsible corporate conduct," he remarked.
The SEBI chief highlighted the necessity for industries to embrace Reg Tech solutions to enhance compliance, reporting, streamline processes, and boost operational efficiency within enterprises.
RegTech solutions assist businesses in utilizing technologies such as AI, machine learning, and cloud computing to automate compliance processes, cut costs, and enhance risk management. These tools can identify potential risks, monitor compliance in real-time, and provide early alerts for non-compliance, thereby minimizing penalties and reputational harm.
Pandey noted that SEBI and the market exchanges are implementing suit-tech solutions for effective and improved supervision.
The application of technology by regulators has proven beneficial in uncovering early indicators of market abuse and non-compliance. Leveraging technological innovations could further diminish potential blind spots, mitigate market misconduct, and foster a culture of continuous compliance among regulated entities, he added.
He also indicated the importance of achieving a balance between regulation and the ease of doing business.
"We recognize that excessive regulation can hinder growth and innovation. Conversely, insufficient regulation can erode stakeholder trust and adversely affect growth. Therefore, a balanced approach to regulation is essential."
The SEBI chief advocated for rationalizing regulations by eliminating outdated clauses and minimizing overlaps.
