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The Tax Publishers Companies (Amendment) Act, 2024--Major Reforms Corporate Governance in Transition : A Critical Discourse on the Companies (Amendment) Act, 2024 CS. Raksha Sankhlecha As the Indian economy expands its global footprint and as investor expectations become increasingly nuanced, corporate governance frameworks must evolve to meet the moment. The Companies (Amendment) Act, 2024 is not merely a regulatory adjustment -- it is a legislative landmark aiming at synchronizing India's corporate ethos with global best practices. This article delves into the reform's origins, evaluates its core provisions, and anticipates its broader legal and economic consequences. 1. Introduction : The Context of Reform In the backdrop of economic volatility, rising ESG awareness, and increasing foreign institutional interest in Indian corporates, the Companies (Amendment) Act, 2024 emerged as a calculated legislative response. It is the sixth major amendment to the Companies Act, 2013 and reflects a continuing trend of iterative reform, rather than wholesale legislative overhaul. The amendment borrows heavily from the recommendations of the Company Law Committee (2023), industry consultations, and cross-jurisdictional models such as the UK Companies Act and U.S. Sarbanes-Oxley principles. The Act, notified in April 2024, aims to build a framework that is simultaneously investor-friendly, fraud-resilient, and innovation-enabling. It underscores India's commitment to transparent capitalism without losing sight of the cost of compliance, especially for emerging businesses. 2. Breakdown of Key Amendments Mandatory ESG Disclosures: A Green Shift in Governance One of the most headline-grabbing provisions of the amendment is the introduction of mandatory Environmental, Social, and Governance (ESG) disclosures under section 134(3)(m), read with rule 8 of the Companies (Accounts) Rules, 2014. Companies listed among the top 1,000 based on market capitalization are now required to publish detailed ESG performance metrics, including carbon footprint, employee welfare schemes, board diversity ratios, and supply chain sustainability. This provision aligns India with global disclosure mandates such as: (i) EU's Corporate Sustainability Reporting Directive (CSRD), (ii) SEC's proposed climate disclosures in the U.S., SUBSCRIBE FOR FULL CONTENT

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Companies (Amendment) Act, 2024--Major Reforms

Corporate Governance in Transition : A Critical Discourse on the Companies (Amendment) Act, 2024

CS. Raksha Sankhlecha

As the Indian economy expands its global footprint and as investor expectations become increasingly nuanced, corporate governance frameworks must evolve to meet the moment. The Companies (Amendment) Act, 2024 is not merely a regulatory adjustment -- it is a legislative landmark aiming at synchronizing India's corporate ethos with global best practices. This article delves into the reform's origins, evaluates its core provisions, and anticipates its broader legal and economic consequences.

1. Introduction : The Context of Reform

In the backdrop of economic volatility, rising ESG awareness, and increasing foreign institutional interest in Indian corporates, the Companies (Amendment) Act, 2024 emerged as a calculated legislative response. It is the sixth major amendment to the Companies Act, 2013 and reflects a continuing trend of iterative reform, rather than wholesale legislative overhaul. The amendment borrows heavily from the recommendations of the Company Law Committee (2023), industry consultations, and cross-jurisdictional models such as the UK Companies Act and U.S. Sarbanes-Oxley principles.

The Act, notified in April 2024, aims to build a framework that is simultaneously investor-friendly, fraud-resilient, and innovation-enabling. It underscores India's commitment to transparent capitalism without losing sight of the cost of compliance, especially for emerging businesses.

2. Breakdown of Key Amendments

Mandatory ESG Disclosures: A Green Shift in Governance

One of the most headline-grabbing provisions of the amendment is the introduction of mandatory Environmental, Social, and Governance (ESG) disclosures under section 134(3)(m), read with rule 8 of the Companies (Accounts) Rules, 2014. Companies listed among the top 1,000 based on market capitalization are now required to publish detailed ESG performance metrics, including carbon footprint, employee welfare schemes, board diversity ratios, and supply chain sustainability.

This provision aligns India with global disclosure mandates such as:

(i) EU's Corporate Sustainability Reporting Directive (CSRD),

(ii) SEC's proposed climate disclosures in the U.S.,