The regulation will ensure that the companies maintained a 'quiet period' before and during the launch of their IPOs, he said, on the sidelines of a FICCI 'Session on Market Oriented Reforms and Corporate Governance Imperatives towards a Global Economy' in Chennai.

Delivering the inaugural address at the session, he said, "Good corporate governance is at least a necessary condition if not a sufficient condition for creating long time value for the shareholders".

Damodaran said shareholders need to know what was being done with their money. "Most often what happens at the AGMs is that no timeframe is fixed for passing resolutions. The shareholders do not question why a particular resolution should not be passed," he said.

On the issue of independent directors on the board, he said they should be able to represent the issues of the minority shareholders.

He also said, "Till a sufficiently large number of companies get into corporate governance, let's not rate them or jump the gun and present them awards".  "Should we have our own Enrons before we put legislations in place?" he asked.