The document discusses the challenges of the Indian corporate governance system and controls for good corporate governance. The key challenges are the power of dominant shareholders, lack of incentives for companies to implement reforms, underdeveloped external monitoring, and shortage of independent directors. Good corporate governance requires internal controls like board monitoring and policies as well as external controls from stakeholders, regulations, media, markets, and financial disclosures.

1. The challenges
of Indian
Corporate
Governance
system

2. 1. Power of the dominant
shareholder(s)

3. 2. Lack of incentives for companies to implement corporate
governance reform measures (no direct relationship
between putting expensive governance systems and
corresponding returns)

4. 3 Underdeveloped external monitoring
systems

5. 4. Shortage of real independent
directors

6. 5. Weak regulatory oversight including
multiplicity of regulators

7. Corporate Governance and
Control
Control is a process in which a person or group of
person will determine what others will do. For a
good Corporate Governance control should be such
that
 Establishes internal control
 Evaluates effectiveness of the control system
 Discloses the drawbacks of the operations
 Takes corrective steps towards the deficiency in
the system

8.  The two types of control adopted in a
company are
 Internal control
 External Control

9. 1. Internal control activities
that ensure proper corporate
governance include:
 Monitoring by board
 Internal audits and robust policies
 Proper balance of power
 Performance based remuneration
 Monitoring by large shareholders and other
stakeholders

10. 2. External Corporate
Governance Controls
 External stakeholders play an important role in
ensuring proper corporate governance processes
in a business organization. Some of the key
external corporate governance controls include:
 Government regulations
 Media exposure
 Market competition
 Takeover activities
 Public release and assessment of financial
statements