Establishing Governance Structure

• The subsidiary must constitute a Board of Directors with clearly defined roles, including independent, executive, and non-executive directors if applicable.
  
• Governance roles and duties should be guided by the Companies Act, 2013, and Articles of Association (AOA).
  
• A Chairman, Managing Director, or CEO must be appointed to oversee day-to-day operations and strategic direction.
  
• Committees such as the Audit Committee, Nomination & Remuneration Committee, and CSR Committee must be formed, where applicable by law.
  
• Responsibilities of directors and key managerial personnel must be documented and aligned with fiduciary obligations.
  

Compliance and Legal Oversight

• The company must ensure regular compliance with the Companies Act, SEBI regulations (if listed), FEMA, tax laws, and sectoral guidelines.
  
• Maintain proper statutory registers, file ROC forms on time, and hold board/shareholder meetings as required.
  
• Adopt and follow the Secretarial Standards (SS-1 and SS-2) for meetings and documentation.
  
• Regularly review internal policies, contracts, and licenses to remain in legal conformity.
  
• Appoint a Company Secretary (if required by law) to advise on governance and ensure compliance.
  

Board Meetings and Decision-Making

• Conduct regular Board Meetings (at least four annually for most companies) with proper notice, quorum, and minute-keeping.
  
• Ensure that all major decisions—financial, strategic, or regulatory—are recorded and approved through board resolutions.
  
• Encourage independent judgment, ethical oversight, and risk evaluation in board deliberations.
  
• Directors must disclose conflicts of interest and abstain from voting in related party matters.
  
• Periodic review of board composition, effectiveness, and succession planning must be done.
  

Transparency and Disclosure

• Maintain transparent financial reporting and operational disclosure in line with Schedule III of the Companies Act.
  
• File annual returns (MGT-7), financial statements (AOC-4), and auditor reports with the ROC.
  
• If the subsidiary is part of a listed group, adhere to SEBI (LODR) regulations regarding disclosure and related party transactions.
  
• Disclose all material events, board decisions, and changes in shareholding or management as required.
  
• Publish code of conduct, whistleblower policy, and other corporate governance documents as applicable.
  

Internal Controls and Ethical Conduct

• Implement robust internal control systems to prevent fraud, misreporting, and non-compliance.
  
• Conduct internal audits, risk assessments, and regular financial reviews to ensure accountability.
  
• Adopt a code of ethics, anti-bribery, and conflict of interest policies across the organization.
  
• Establish a whistleblower mechanism that allows anonymous reporting of misconduct with adequate protection.
  
• Ensure all employees, especially senior management, are trained in compliance and ethical standards.