Volume : 1, Issue : 5, October - 2012

Corporate Governance Practices in India: An Evaluation

Sharma Ramroop K.

Abstract :

Corporate Governance (CG) is increasingly becoming important in India since its codification by Confederation of Indian Industries (CII) in 1998. Establishment of different committees on CG by the regulator has contributed to the first phase of CG reforms. Subsequently, CG regulations became mandatory (since 1.1.2006) through the Listing Agreement i.e., Clause 49. Clause 49 also comprises non–mandatory provisions. However, CG has not yielded desired results as apparent from different scandals. Few years back Satyam Computers scandal has eroded wealth of many shareholders. Such an event has raised doubts to the extant and prospective investors. It engendered new recommendations of CG in second phase of CG reforms. Recently, entry of Foreign Direct Investment (FDI) in retail and aviation sectors by the Government of India will require more effective and efficient implementation of CG to win investors. Here an attempt has been made to study mandatory CG practices as per Clause 49.