CORPORATE GOVERNANCE IN INDIA – CHALLENGES AND SUGGESTIONS

Abstract

Corporate governance is an amalgamation of rules, regulations, and by-laws through which the corporate entities are run, managed and controlled. The concept of corporate governance in India was prevailing from the 1960s but in terms of practical implementation, it still lags behind where India is witnessing various numbers of scams each year. This paper provides the meaning of the term corporate governance and also explains the significance of corporate governance. The paper makes an effort to identify the ways in which the principles of ethics can be balanced with the profit-making intentions of the companies. It also analyses the development and working of clause 49 of SEBI. The paper also explains the role of independent directors in the company’s success. The Indian model of corporate governance is one of the best corporate governance models around the world yet we see a various number of scams happening due to flawed application of its principles and policies. For e.g. Indian model of corporate governance gives a priority to the recognition of shareholder’s rights but in terms of implementation, it is seen that companies follow poor disclosure practices, lack of transparency, not prioritizing shareholder’s interest leading to scams and manipulation of public money. The paper puts forth the challenges in the Indian model of corporate governance and provides suggestions that might be implemented to bring ethical and transparent corporate governance in the country. This paper examines the relationship between the Tata - Mistry controversy and corporate governance principles. This is a qualitative research paper dealing with the concept of corporate governance in India.