Tag: Corporate Governance
-
The Efficacy of Conventional Corporate Governance Instruments
Each time there is a corporate governance scandal (whether in India or elsewhere), the response has been to use a set of instruments (implemented through regulation or best practices) to avoid a repetition of such occurrences. It appears that these instruments have not always been successful as they come with certain innate limitations, but they…
-
The Tale of the Resigning Director
In the aftermath of events that occurred at Satyam and Nagarjuna Finance, there has been a mass exodus of independent non-executive directors from boards of Indian listed companies. More often that not, there is no apparent reason offered for resignation by such directors. As we had discussed in an earlier post, the SGX in Singapore…
-
The Duties of Non-Executive Directors
Earlier discussions on corporate governance norms have raised questions about the role of independent non-executive directors in maintaining appropriate standards of governance. In this context, a recent Australian judgment indicates the nature of duties which a non-executive director may be required to discharge. Australian Securities and Investment Commission v. MacDonald involved a situation where the…
-
The Convergence Debate and Indian Corporate Governance
An interesting article by Afra Afsharipour (UC Davis School of Law) titled Corporate Governance Convergence: Lessons from the Indian Experience is available on SSRN. Here is the abstract: Over the past two decades, corporate governance reforms have emerged as a central focus of corporate law in countries across the development spectrum. Various legal scholars studying…
-
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…
-
Government’s ‘Independent’ Directors
With the U.S. Government controlling various companies now, it is in the process of revamping the boards of directors of such companies. The obvious question relates to the role that the Government would take in the management of the companies, and particularly in the selection of their directors. In an op-ed column in the New…
-
A Call for Greater Shareholder Rights under U.S. Law
The proposed Shareholder Bill of Rights Act of 2009 in the U.S. that comes in the wake of the financial crisis gives rise to an important debate regarding the rights of shareholders in companies. The rationale for the Bill is the perceived failure of corporate governance that led to the crisis. It is worthwhile to…
-
Corporate Governance and Protection of Minority Shareholders
Corporate law and corporate governance norms are devised to address certain agency problems (as they are known in economic terms). In countries where there is diffused shareholding (such as the U.S. and the U.K.), the agency problem that is prevalent is one between managers (the agent) and shareholders (the principal). Diffused shareholding gives rise to…
-
Independent Directors in the Post-Satyam Era
The Serious Fraud Investigation Office (SFIO) appears to have given a clean chit to Satyam’s independent directors, as it was found that the board was not involved in the fraudulent conduct and that they were kept in the dark. Much has already been written about the difficulties of placing too much reliance on the role…
