Tag: Corporate Governance
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Much Ado About Executive Compensation
[Posted by Umakanth Varottil] Over the last few weeks, significant attention has been drawn to the issue of executive compensation, following observations by the Minister for Corporate Affairs that there ought to be moderation in CEO salaries in India. Two factors seem to have triggered such attention. One, which carries political overtones, is the Government’s…
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Corporate Governance Accreditation
[Posted by Umakanth Varottil] In Singapore, there is a proposal for listed companies to seek voluntary accreditation of their corporate governance processes and framework from an independent body. This is akin to the ISO certification process. As this report suggests, while such accreditation will better inform retail investors regarding corporate governance practices followed in a…
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Fiduciary Duties and Non-Executive Directors
[Posted by Mihir Naniwadekar] An earlier post had discussed a recent Australian judgment on the role and duties of a non-executive director, Australian Securities and Investment Commission v. MacDonald. More recently, according to a report on the Corporate Law and Governance blog, the Inner House of the Court of Session of Scotland has again commented…
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Compliance with Accounting Standards and the “True and Fair” View
[Posted by Mihir Naniwadekar] Can it be said that just because the Accounting Standards are not complied with, the accounts of a company do not present a true and fair picture of its financial position? Is compliance with the Accounting Standards mandatory, or are certain deviations justified? The Supreme Court’s observations in JK Industries v.…
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Towards evolving Global Corporate Governance Standards
[Posted by Mihir Naniwadekar] In a recent article, Mr. Umakanth drew a distinction between ‘insider’ and ‘outsider’ models of corporate governance, and argued that “…the current regime on corporate governance has been transplanted from jurisdictions which display diffused shareholding and hence is inappropriate to the Indian regime which is dominated by promoter-controlled companies. What is…
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Contestability of Corporate Control
[Posted by Umakanth Varottil] In a column in the Business Standard, Nitin Desai argues that the current ecosystem in India provides greater benefits to corporate control, resulting in a number of large Indian companies being managed by the promoter-owners. Corporate control may be susceptible to challenge if there is a market for control facilitated by…
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SEBI’s Proposed Changes on Disclosures and Audit Norms
[Posted by Umakanth Varottil] After the Satyam fraud earlier this year, there was expectation of significant regulatory changes that strengthen corporate governance, disclosure and audit norms in India companies. Some changes did occur almost immediately; for instance, detailed measures were introduced favouring disclosure of pledges by promoters. However, the Companies Bill, 2009 introduced in Parliament…
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Corporate Frauds; Earnings Management
[Posted by Umakanth Varottil] One question that does not seems to have been fully answered in the last few months is whether the Satyam episode is truly an aberration or whether it is just the tip of the iceberg (thereby signalling a systemic problem generally in several Indian companies). The Economic Times has an interesting…