Corporate Governance in India: Investors' Perspective

The purpose of this study is to analyze the perceptual responses of investors with special reference to the study of corporate governance. Parameters included in the study pertain to the regulatory framework, corporate practices vis-Ã -vis corporate governance, behaviour of stock market intermediaries and stock market functioning for ensuring investors' protection. The results of the study show that the investors are of the opinion that the regulatory authorities are not able to provide the effective regulatory environment for ensuring corporate governance, however, respondents are satisfied with the behaviour of stock market intermediaries. Moreover, respondents are of the view that corporate practices are not investor-friendly. Dissatisfaction of respondents is more pronounced with regard to volatility of share prices and the involvement of companies in the insider trading. Respondents are also of the view that stock exchanges do not work in the interests of investors in general. The basic reason for this is the delisting of companies by stock exchanges in case of any violation of listing agreement or the provisions of voluntary delisting of companies. Investors are of the opinion that to ensure effective regulatory environment, stock exchanges should take disciplinary actions against directors and principal officers of the companies rather than resorting to delist the companies .