[The following guest post is contributed by Professor Bala N. Balasubramanian, who is an Adjunct Professor at the Indian Institute of Management, Ahmedabad.][1] The scholarly debate on primacy among the shareholders, boards and the executive in corporate governance is intellectually as challenging as it is yet inconclusive, although more recent trends around the world would seem to suggest at...
Survey of Corporate Governance in Asia
The OECD has just published its OECD Survey of Corporate Governance Frameworks in Asia. Covering 14 different economies in Asia, the Survey covers various aspects of corporate governance from ownership structures, regulatory issues, board matters, shareholder rights, and the like that are prominent in relation to corporate governance of companies in those countries. The key is that in most of...
SEBI Order in the United Spirits Case
Over the last year or so, there has been considerable discussion in the press about the allegations of diversion of funds by the erstwhile management of United Spirits Limited (USL) to other companies within the United Breweries (UB) group, including Kingfisher Airlines Limited (KFA). This was also a result of investigations conducted by USL through certain audit firms. Subsequently, this became...
Delaware Supreme Court on Board Independence
Issues of board independence, and particularly the position and role of independent directors, have resurfaced to the fore in India in recent months. Given this scenario, it may be useful to consider developments relating to board independence occurring elsewhere. Here, a ruling last month from the Delaware Supreme Court on the determination of board independence would be of interest. In Thomas...
SEBI Elaborates on Board Evaluation
Along with the considerable enhancement in the duties and responsibilities of boards of directors of Indian companies that was occasioned due to the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, there has been a considerable emphasis on board evaluation as a measure of not only enhancing corporate governance in general, but also as a means...
Et tu Tata!
[The following guest post is contributed by Professor Bala N. Balasubramanian, who is an Adjunct Professor at the Indian Institute of Management, Ahmedabad] Recent developments at the Tata Group in general and Tata Sons particularly have shaken corporate India in terms of standards of good governance in companies. The group had meticulously built a reputation over the years for ethical and...
Appointment and Removal of Independent Directors: Need for Reform?
The removal this week by three Tata group companies of Mr. Nusli Wadia as an independent director from each of them has reinvigorated some of the debate surrounding board independence from a conceptual standpoint. This has provided critics of board independence with more fodder. In the past, there was anecdotal evidence that whenever there were disagreements between managements or promoters on...
Comparative Paper on Corporate Purpose
Professor Afra Afsharipour has posted on SSRN a paper titled “Redefining Corporate Purpose: An International Perspective”, the abstract of which is as follows: Over the past decade, corporate law in India has begun a reform journey with important implications for not only corporate governance, but also for deeper questions about the purpose of the corporation and beneficiaries of the corporate...
Tata Group Companies: “Long-Term Interests” the Key Touchstone
The episode surrounding the Tata Group has taken further twists and turns. After several Tata Group companies expressed their support in favour of Mr. Mistry, who continues to be chairman of several of those companies, one company – Tata Global Beverages – adopted a different stance. In a board meeting held this week, the directors of Tata Global Beverages decided by a 7:3 majority to replace Mr...
Further Analysis on Compensation Agreements
[The following guest post is contributed by Rohit Sharma, who is a Research Associate at Vinod Kothari & Co. Two earlier posts on this topic are available here and here.] Introduction The Securities and Exchange Board of India (SEBI) drew attention to the issue of compensation arrangements that take place between the private equity investors (PE) and the promoters, directors and key...
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