NEED OF THE STEWARDSHIP CODE: A RELOOK ON KOTAK COMMITTEE'S REPORT

The theory of Stewardship is not the new concept but it came in the light in 2010 when UK established its UK Stewardship code, which became the model code for many countries who made the code in their country on the line of UK code. The code comprises set of principles on how institutional investors are ought to act as shareholders of companies. This code works on the ‘comply or explain' approach. This holds relevance in the backdrop of several irregularities found in the governance of many companies and several scams took place relating to the institutional investors. This topic became relevant in India after Uday Kotak Committee report on the corporate governance which recommended common Stewardship Code across sectors. Moreover, UK-India Financial Partnership also recommended for the same. In the light of the above needs, India must have a Stewardship Code based on the principle of transparency and accountability. India should frame its code based on the best international practices and also taking into consideration the special needs of the Indian Capital Market. This code will help in setting the accountability to the institutional investors. They need to participate in the investee company by way of voting and by way of participation in the meeting, which will help the ultimate investor's investment. This in a way will helpful for the Investee Company as well as for the investors/ beneficiaries. This paper focuses on a particular manifestation of this positive view of shareholder engagement as per stewardship code envisaged by Kotak Committee Panel and emergence of shareholders activism in India.