PRESENTATION ON: CORPORATE

GOVERNANCE IN INDIAN
PERSPECTIVE
SUBJECT: CORPORATE STRATEG II

PRESENTED BY :

G. Sowjanya
Abhimanyu Singh
Harshada Singh
Aniket upadhyay
B.B.A LL.B
8TH Semester
 MEANING OF CORPORATE
GOVERNANCE
It is a process set up for the firms based on
certain systems and principles by which a
company is governed.

The guidelines provided ensure that the

company is directed and controlled in a way
so as to achieve the goals and objectives to
add value to the company and also benefit the
stakeholders in the long term.
DEFINITION
Corporate governance is the acceptance by management
of the inalienable rights of the shareholders as the true
owners of the corporation and of their own role as
trustee on behalf of the shareholders. It is about
commitment to values, about ethical business conduct
and about making a distinction between personal and
corporation funds in the management of the company.

By N.R Narayana Murthy, Committee

on Corporate Governance (SEBI)
HISTORY:
The corporate governance concept dwells in India from the
Arthshastra time instead of CEO at that time there were kings
and subjects. Today, corporate and shareholders replace them
but the principles still remain same, unchanged i.e. good
governance.
20th century witnessed the glossy of Indian Economy due to
liberalization, globalization, and privatization.
Indian economy for the 1st time here was together with world
economy for product, capital and labour market and which
resulted into world of capitalization, corporate culture, business
ethics which was found important for the existence of
corporation in the world market place.
The report of Cadbury Committee on the financial aspects of
corporate Governance in the U.K. has given rise to the debate of
Corporate Governance in India.
 PRINCIPLES OF CORPORATE GOVERNANCE

Rights & equitable treatment of shareholders

Interest of other stakeholders

Role and responsibilities of board

Integrity and ethical behavior

Disclosure and transparency

FEATURES OF GOOD CORPORATE
GOVERNANCE

Clear strategy
Effective risk management
Discipline
Fairness
Accountability
Transparency
Social Responsibility
Self-Evaluation
 MODELS OF CORPORATE
GOVERNANCE
Different models of corporate governance differ
according to the variety of capitalism in which
they are embedded

Continental Europe (Two-tier board

system)

India

United States, United Kingdom

 OBJECTIVES OF CORPORATE
GOVERNANCE
Adequate disclosures and effective decision making
to achieve corporate objectives;

Transparency in business transactions;

Statutory and legal compliances;

Protection of shareholder interests;

Commitment to values and ethical conduct of

business.
NEED OF CORPORATE
GOVERNANCE:

Wide Spread of Shareholders

Changing Ownership Structure
Corporate Scams or Scandals
Greater Expectations of Society of the
Corporate Sector
Huge Increase in Top Management
Compensation
Globalization
SYSTEMIC PROBLEMS:
Demand for information: In order to influence the directors, the
shareholders must combine with others to form a voting group which
can pose a real threat of carrying resolutions or appointing directors at
a general meeting.
Monitoring costs: A barrier to shareholders using good information is
the cost of processing it, especially to a small shareholder. The
traditional answer to this problem is theefficient-market hypothesis(in
finance, the efficient market hypothesis (EMH) asserts that financial
markets are efficient), which suggests that the small shareholder will
free ride on the judgments of larger professional investors.
Supply of accounting information: Financial accounts form a crucial link
in enabling providers of finance to monitor directors. Imperfections in
the financial reporting process will cause imperfections in the
effectiveness of corporate governance. This should, ideally, be
corrected by the working of the external auditing process
EXAMPLES OF COMPANY WITH
GOOD & BAD CORPORATE
GOVERNANCE IN INDIA
Infosys is India's best company for corporate
governance

Infosys topped a poll on best practices in corporate

governance conducted by Asiamoney. Infosys ranked # 1
across categories of disclosure and transparency,
responsibilities of management and the board of directors,
and shareholders' rights and equitable treatment'.

Percentage of votes

Corporate Governance - 17.74%

Disclosure and Transparency - 20.90%
Responsibilities of management and the board of directors -
18.75%
Shareholders right and equitable treatment - 20.93%
 THE SATYAM SCAM
The failure of corporate governance and of
misleading accounts is a failure of both the
management and of the auditors.
The promoters decided to inflate the revenue and
profit figures of Satyam. In the event, the company
has a huge hole in its balance sheet, consisting of
non-existent assets and cash reserves that have
been recorded and liabilities that are unrecorded.
This episode has led to debates in India, about some
of inadequacies in the corporate governance norms.
Questions have been raised about the performance/
effectiveness of board of directors, roles of auditors,
the impact of regulations, disclosures, etc
CONCLUSION:
The concept of corporate governance hinges on total
transparency, integrity and accountability of the management
and the board of directors. The importance of Corporate
Governance lies in its contribution both to business prosperity
and to accountability.
In the age of globalization, global competition, good corporate
governance helps as a great tool for corporate bodies. It existed
from Vedic times as the Highest standards in ArthaShastra to
todays set of ethics, principles, rules, regulations, values,
morals, thinking, laws etc as good corporate governance.
Corporate Governance is a means not an end, Corporate
Excellence should be the end. Once, the good Corporate
Governance will be achieved, the Indian Corporate Body will
shine to outshine the whole world.