IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Corporate Governance and the Indian Private Sector

Listed author(s):
  • Jairus Banaji
Registered author(s):

    The following study examines the issue of corporate governance in the context of large private sector companies in India against a regulatory background that is changing rapidly. Based on over 170 interviews with a very wide range of business representatives, including CEOs, non-executives, fund managers and audit firms, the two reports which make up the study highlight the ineffectiveness of boards in Indian companies, the lack of transparency surrounding transactions within business groups, the divergence of Indian accounting practices from international standards, and the changing role of, and controversy surrounding, institutional shareholders. Respondents concurred on the failure of the board as an nstitution of governance in Indian companies, despite the large presence of non-executives. The authors argue that regulatory intervention needs a much stronger definition of 'independence' for directors, in line with best practice definitions ow adopted in the US and UK, as well as the mandatory introduction of nomination committees. In the accounting field, the most serious lacuna is the lack of consolidation of accounts, even if 51% may be too high a threshold for consolidation in the Indian context. Finally, the presence of institutional nominees is a unique feature of Indian corporate governance and here has been a powerful corporate lobby in favour of removing them from boards. While this would reduce the accountability of Indian boards even further, the reports argue that a more active approach to corporate governance on the part of institutional investors requires larger changes in the nature of the FIs' ownership and control by government, reater autonomy for institutional managers, and the active development of a market for corporate control.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: no

    Paper provided by Queen Elizabeth House, University of Oxford in its series QEH Working Papers with number qehwps73.

    in new window

    Date of creation:
    Handle: RePEc:qeh:qehwps:qehwps73
    Contact details of provider: Postal:
    Queen Elizabeth House 3 Mansfield Road, Oxford, OX1 3TB United Kingdom

    Phone: +44 (1865) 281800
    Fax: +44 (1865) 281801
    Web page:

    More information through EDIRC

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:qeh:qehwps:qehwps73. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Rachel Crawford)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.