CORPORATE GOVERNANCE & ITS IMPACT ON CORPORATE ENVIORMENT

PRESENTED TO:
PRESENTED BY:

MR. MUKHARJEE
SWATI (MBA II YEAR)

CORPORATE GOVERNANCE ???

Practices, Principles and

Values that guide a company and its business every day, at all levels of the organization

Fundamental functions of Corporate Governance

Corporate governance links directly to three fundamental functions of boards and the directors of the companies and shareowners they serve. They are: Protecting

stakeholder rights. Managing risk Creating long-term business value

Driving Forces of CG in India

1)

Unethical Business Practices

Security Scams ---Harshad Mehtha Security Scam Equity allotments at discount rates to the controlling groups Disappearance of Companies (1993-94) - around 4,000 companies with 25,000 crores without starting business Misdeed of Companies Plantation, Sheep rearing, etc.

2)

Impact of Globalization

Integration with Foreign Market Foreign Investors expectations New Business Opportunities --- IT & ITES, BPO etc., New Capital formation FII, FDI

3)

Impact of Privatisation

New structure of ownership Multinational Companies

Improvement in corporate governance.

Focusing on the purpose of the authority. Informed and transparent decisions. Developing the capacity. Engaging with local people and stakeholder.

Purpose of corporate governance is to have a demonstrable IMPACT on a corporations FINANCIAL PERFORMANCE.

Governance and performance

Good governance leads to good performance It creates an open and transparent system It improves communication and breaks down systematic barriers to flow of information Good governance allows decision making based on data. It reduces risk Good governance helps in creating a brand and creates comfort for all stakeholders and society

Corporate governance & firm performance

It represents the relationship among stakeholders that is used to determine & control the strategic direction & performance of the organization. It involves oversight in areas where owners, managers & members of board director may have conflicts of interest.

THE TOP 10 SCAMS IN INDIA!!!

2G Spectrum Scam 2) Commonwealth Games Scam 3) Telgi Scam 4) Satyam Scam 5) Bofors Scam 6) The Fodder Scam 7) The Hawala Scandal 8) IPL Scam 9) Harshad Mehta & 10) Ketan Parekh Stock Market Scam
1)

Improvements in corporate governance in Indian companies

Improvements in corporate governance in Indian companies seem largely to be voluntary and driven by globalization. Companies that wish to access markets for capital are becoming increasingly transparent and are more willing to adopt higher corporate governance standards. These governance changes are having a trickle-down effect on smaller Indian companies.

Example: Corporate Governance and Capital

Markets

Source: A McKinsey Survey of Global Investors

ICSI NATIONAL AWARD FOR EXCELLENCE IN CORPORATE GOVERNANCE

Best Governed Companies

Conclusion.
Retain stakeholders, Access foreign capital, Become a reputable company to export globally, Desire to become multinational companies, THEN, It is important to understand the ways to improve the corporate governance for as long as we keep our economy free and open.