If investor confidence is a ship, then information is compass and good governance its anchor: SEBI chief

According to Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch, the necessity of corporate governance practises by issuers is underscored by the disclosure-based regime chosen for the Indian securities market.

According to her chairperson's statement in SEBI's Annual Report 2022-23, "if investor confidence is a ship on rolling seas, information is the navigator's compass and good governance its anchor."

"It would not be in the interest of anyone if, either investors became fearful of investing because of anxiety about governance, or if the greed of conflicted parties were to manifest itself in the form of fraud on minority shareholders," she added.

As public companies diversify their operations and spread across the globe, the internal structures and business dealings surrounding them become increasingly complex. A'significant mismatch of interest' might arise through Related Party Transactions (RPTs), even if promoters and minority shareholders often have similar goals.

For governance failures, especially those involving RPTs, SEBI has taken action against listed businesses. SEBI's goal is to increase openness in these deals so that Audit Committees, Boards, and investors can all make educated decisions.

The Securities and Exchange Board of India (SEBI) states that a central tenet of the regulatory system developed by the capital markets regulator is to enable market participants to make educated decisions through the dissemination of timely, accurate, and complete information.

"Disclosures mandated for listed companies and mutual funds are focused on addressing the risk of information asymmetry in the market," the chairwoman stated.

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