This document discusses corporate governance in India. It begins by introducing corporate governance and its importance for achieving global competence. It then outlines some of the key initiatives and regulatory frameworks for corporate governance in India, including the Companies Act of 1956. However, it notes that enforcement remains a major weakness. The document also examines various issues with corporate governance in India such as the role of promoters, accounting practices, board independence, and the need for more activist institutional investors. It concludes by stressing the importance of good corporate governance standards for India's future growth and stability in the global economy.

1. DIMENSIONS OF CORPORATE
GOVERNANCE IN INDIA
1
Deepukumar
Assistant Professor
GFGC Kushalnagara
Coorg District.
Girisha.M C
Assistant Professor
GFGC Periyapattana
Mysore District.

2. INTRODUCTION
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 To achieve global competence in a sustained manner
Corporate Governance (CG) is vital
 CG is concerned with agency problem i.e. separation of
ownership and control.
 It is an arrangement and mechanisms employed by the
owners to induce the management.
 The emphasis is on responsibility and accountability of
owners and management and other parties.

3. GOOD CORPORATE GOVERNANCE
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•It is all about governing a company
with transparency, honesty, openness
and conscience.
•According to OECD the GCG is a
system of process, practices, customs,
polices, laws by which the companies
are directed and controlled.
•The importance of GCG goes beyond the interest of an
individual company and it is crucial to the integrity and
credibility of our market system.

4. CORPORATE GOVERNANCE IN INDIA
INITIATIVES & REGULATORY FRAMEWORK
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 In India concerns were triggered by a wave of crises in
the early 1990’s
 In India, the Companies Act 1956 provides the legal
framework for companies and is the main instrument for
corporate governance.
 The ICAI and ICSI both statutory institutions perform a
significant role in promoting better corporate practice and
governance.
 SEBI as a statutory body further regulates the listed
companies - It has introduced clause 49 of the listing
agreement .

5. ISSUES IN INDIAN CG
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 The relationship between shareholders particularly in family
owned or controlled companies
 Related party transactions & Quality of financial disclosure
 The role of promoters
 Independent oversight of the Indian accounting profession
 Limited activism of domestic institutional investors,
 Issues of director independence and board effectiveness

6. LACK OF ENFORCEABILITY
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 Enforcement is possibly the critical issue, and one that
demands foremost priority.
 Most CG assessments and reports repeatedly point to the
lack of enforcement as a major weakness.
 The OECD warned that enforcement remained the most
significant challenge in India.
 In Corporate Governance Watch Report 2010 India has
been down rated to 7th place from 2nd due to lack of
enforceability.

7. ROLE OF PROMOTERS
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 Accountability of promoters is a key challenge at the
heart of the governance problem.
 A large No. of governance problem in India are related
to the position of controlling shareholders to that of
minority shareholders.
 Family group ownership still dominates the Indian
corporate landscape.
 Promoters play an important and pervasive role in
Indian corporate governance.

8. ACCOUNTING PROFESSION
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 In India one of the important issues is
the need for more independent oversight
of the accounting profession.
 The case of Satyam is a wake-up call to
mandate thorough accounting and
auditing procedures, as well as
disclosure requirements, to safeguard
against fraud and divergence.
 The world should adopt a uniform global
accounting standard (IFRS)

9. INDEPENDENT DIRECTORS
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 There continues to be a lot attention
focused on this issue.
 They are nominated by controlling
stockholders
 Many independent directors does not
possess the skills necessary to address
exploitation of minority share holders.
 Need to focus on a higher level of
director professionalism on Indian
boards.

10. INSTITUTIONAL INVESTORS
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 The success of corporate governance
relays on the expectation that
institutional investors will responsibly
engage with companies.
 It is an obligation that is not sufficiently
exercised in most emerging markets
including India.
 Without a vibrant institutional investor
community, companies are not going to
take corporate governance very seriously.

11. LOOKING FORWARD
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 International investing is governed by quality of good
governance.
 GCG in big companies is a guiding force for the mid
and small companies to devise effective governance
framework.
 The Govt. must Promote investor friendly
environment.
 Indian companies should stand in high in designing
effective policies, philosophies and procedures.
 Adoption of the modern practices would greatly
enhance the image of the GCG in India.

12. CONCLUSION
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 As capital flows world wide, CG has become need for
the future growth and stability.
 Adopting good standards help the corporations to
become good corporate citizens in the global
community.
 Sound and GCG practices are closely linked to
India’s future.
 Rules must be effectively enforced and they must be
timely, consistent, predictable, transparent and
impartial to all market players.

13. Thank you