The Institute of Company Secretaries of India (ICSI) has broached the idea of a standardised corporate governance rating model.

In a presentation to the capital market regulator, the professional body proposed on Tuesday that it was ready to shoulder the responsibility of creating such a model.

S.N. Ananthasubramanian, President of the ICSI, told Business Line that standardisation of the model was imperative at a time when SEBI was trying to encourage the rating to improve the governance practice monitoring.

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CONSULTATIVE PAPER

ICSI has also suggested that armed with the model, professional organisations that could remain at arm’s length from the corporations might be able to rate governance. SEBI has proposed in its recent consultative paper that companies could carry out corporate governance rating by the registered credit rating agencies. Incidentally, these agencies have proactively been providing governance rating services to willing corporations since 2001.

Though all the rating agencies claim that they follow the best global practices, emphasis and methodologies vary, according market observers. Rating agency officials admit that in case of corporate governance rating, subjective opinion plays a bigger role than objective numbers.

Last month, SEBI had sought suggestions on the proposed norms for the governance issues including that of rating. Ahead of enactment of the Companies Bill, 2012, (passed by the Lok Sabha), the securities market regulator has undertaken an exercise to realign provisions of the Clause 49 of the listing agreement with that of the Bill. (The Hindu)