Tag: Corporate Governance
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Oil Price Rise: Shareholders vs. Consumers
[Posted by Umakanth Varottil] The spike in the price of oil has created a peculiar situation for the Indian oil companies that are in the public sector. These public sector undertakings (PSUs) are predominantly owned by the Government, with a portion of the shares (usually a minority) held by public shareholders. The shares of these…
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Some Lessons from Bear Stearns
[Posted by Umakanth Varottil] The New York Times DealProfessor has a column Burying Bear Stearns that highlights the takeaways from the Bear Stearns saga, which incidentally are matters we often endeavour to stress on this blog. They are: – Moral hazard– Systemic risk– Corporate governance
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Training Directors
[Posted by Umakanth Varottil] I had earlier posted about the Chartered Director test prescribed by the Institute of Directors in London, which is a qualifying examination for directors on corporate boards. In response, one our readers from Australia, Susie Reece Jones, has been kind enough to provide us with some details about the situation in…
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An Examination for Directors
[Posted by Umakanth Varottil] A few weeks ago, we carried a post by Pramod Rao discussing the implications of recent changes to Clause 49 of the listing agreement, the key ones being strengthening the role of the independent directors on boards of Indian listed companies. Although relegated only to a non-mandatory provision, one of the…
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Micro..hoo: A New Twist
[Posted by Umakanth Varottil] This new development on the international M&A front is worth briefly noting on this blog. We had all expected to see a highly-contested battle for control of Yahoo! panning out over the next few months. A hostile bid by Microsoft was keenly on the cards. But, it all ended last weekend…
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Corporate Governance & Enforcement
[Posted by Umakanth Varottil] The corporate governance norms prescribed by SEBI were tightened earlier this month (as discussed here), whereby the requirement of independence of directors has been made more stringent. However, it is disheartening to note that while there is a move by the regulator to enhance mandatory norms on corporate governance at a…
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Regulating Companies: Whose Role is it Anyway?
[Posted by Umakanth Varottil] In the case of listed companies, when it comes to corporate governance, there is a classic dichotomy in regulation. On the one hand, it is the Ministry of Company Affairs that is largely responsible for the implementation of the Companies Act, 1956, while it is SEBI that is responsible for implementation…
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Directors’ Duties During Times of Crises
[Posted by Umakanth Varottil] The unexpected market conditions in recent times have rocked corporate boards world over. Healthy companies have begun to declare less satisfactory results, while the unlucky one’s face extinction. Companies are increasingly being exposed to liabilities towards shareholders, creditors and other counterparties, and consequently, directors of such companies are having to face…
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Enforcement of Corporate Governance Norms
[Posted by Umakanth Varottil] A new paper “Corporate Governance, Enforcement, and Firm Value: Evidence from India” authored by Dhammika Dharmapala & Vikramaditya Khanna has been posted on SSRN. Here is the abstract: “This paper analyzes the effects of corporate governance reforms and enforcement on stock market development and firm value, using a sequence of corporate…
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Corporate Governance Study
[Posted by Umakanth Varottil] Research in areas of corporate governance involving Indian companies has not been substantial, compared to that in its emerging market counterparts such as China. However, a recent study that has been commissioned by the IFC Global Corporate Governance Forum in consultation with SEBI and the National Institute for Securities Markets (NISM)…