The concept of corporate governance became a central theme following the introduction of the Sarbanes-Oxley Act in the United States. This law was passed to restore public confidence in business. Clause 49 of the Listing Agreement by Securities Exchange Board of India explains the issue of corporate governance and imposes the standards by which companies must work. following the adoption of the new Law on Shares in 2013; SEBI has amended clause 49 of the listing agreement by an official circular to bring it into line with the new law.  The amended clause has been in effect since October 2014. Article 49 of the SEBI Guidelines on Corporate Governance, as amended on 29 October 2004, made substantial changes to the definition of independent directors, strengthened the responsibilities of audit committees, the quality of financial information, including that relating to transactions with related companies and revenues from preferential rights/issuances, the obligation for boards of directors to adopt a formal code of conduct, the requirement for certification of financial statements by the CEO/CFO and improved disclosure to shareholders. Some non-mandatory clauses, such as the whistleblower policy and the term limits of independent directors, have also been included.  Under the clause, no person may be an independent director of more than seven publicly traded companies. Where a person holds a full-time director role in a publicly traded company, he or she may not be the independent director of more than three publicly traded companies.
In 2014, Clause 49 was amended to include the Whistleblower Directive as a mandatory provision. The company is required to obtain a certificate of compliance with corporate governance, as specified in this clause, and to attach this certificate to the director`s report which is sent annually to the shareholders of the company. . . .