The Practice of Corporate Governance in India

As far as corporate governance is concerned, although there are detailed norms on paper in the form of Clause 49 of the listing agreement, what matters is their implementation in practice. There are limits to legislating on corporate governance as a lot depends on the integrity and ethical values of various corporate players such as directors, managers, promoters and other stakeholders. There is a risk that corporate governance is treated as a “check-the-box” requirement rather than something that permeates the soul of the corporate sector.

Several empirical surveys in India have been conducted over the last couple of years that show that while the norms on the books are quite elaborate and stringent, they are not practised to the extent desirable. There is consensus on this broad trend, although there is some divergence as to the acceptance of specific governance practices. The purpose of this post is only to aggregate and list these surveys that can act as a reference point for the interested reader to delve into:

1. Firm-Level Corporate Governance in Emerging Markets: A Case Study of India (July 2008) by N. Balasubramanian, Bernard S. Black & Vikramaditya Khanna;

2. India Board Report – 2007: Findings, Action Plans and Innovative Strategies by AT Kearney, AZB & Partners and Hunt Partners;

3. CG Review 2009: India 101-500 (March 2009) by FICCI & Grant Thornton;

4. The State of Corporate Governance in India: A Poll (2009) by KPMG Audit Committee Institute; and

5. A recent survey by Bain & Company and KPMG reported in June 2009.