Emergence of corporate governance in India

Abstract

The present paper is a theoretical exposition focusing on regulatory mechanism on corporate governance in developing economies. In India, lots of serious efforts have been made at overhauling the economic system since liberalization. As a part these initiatives, the SEBI instituted the Clause 49 of the Listing Agreements dealing with corporate governance in India. The corporate governance in India is undergoing a process of change with a move towards more market-based governance. India, with its vast population has emerged as one of the most attractive country for the multi nationals as they scourge around the world to woo the customer. These organizations in their attempt to attract the customer have indulged in number of malpractices damaging the geographical, socio, and political climate of the destination country. India has the best corporate governance laws but poor implementation together with socialistic policies of the pre-reform era has affected corporate governance. Concentrated ownership of shares, pyramiding and tunneling of funds among group companies mark the Indian corporate landscape. Boards of directors have frequently been silent spectators with the DFI nominee directors unable or unwilling to carry out their monitoring functions.