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Issues and Challenges in Corporate Governance with special reference to Indian Context.

Dr. Dhanya. K .A Asst. Professor & Head Dept. Commerce & Mgt.Studies Amal College of Advanced Studies Nilambur. Issues and Challenges in Corporate Governance with special reference to Indian Context. Contents. Section 1 Introduction, Objectives, Methodology Section 2

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Issues and Challenges in Corporate Governance with special reference to Indian Context.

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  1. Dr. Dhanya. K .A Asst. Professor & Head Dept. Commerce & Mgt.Studies Amal College of Advanced Studies Nilambur Issues and Challenges in Corporate Governance with special reference to Indian Context.

  2. Contents Section 1 Introduction, Objectives, Methodology Section 2 Discussions and Analysis-Challenges & Issue - Compliance SEBI - Opinion Survey Section 3 Strategic Model & conclusion

  3. Introduction

  4. Significance of the study • Controversial topic • Hidden practices and corporate culture • Clause 49 of SEBI

  5. Objectives of the study • To give an overview of major issues and challenges in corporate governance practices • To examine the extent of compliance of corporate governance guidelines by listed companies in India • To asses the opinion of corporate officials on some selected issues in corporate governance

  6. Methodology *Descriptive study *Sources of Data- Primary & secondary *Selection of sample corporate officials – managerial positions newly listed companies – 2016 * Sample size – primary data - 40 officials - secondary data - 56 companies- 30 companies are selected

  7. Methodology….. • Data Collection * Primary data :Questionnaire – 5 point scale, ranking * Secondary data: NSE website • Tools for Analysis - Check List - Anova , Friedmantest HYPOTHESES • There is no significant difference in the mean score of challenges • There is no significant difference in the ranking of selected issues.

  8. Limitations of the study • The study takes into account only a small sample of 30 companies due to shortage of time when compared to large number of listed companies. • The extent of compliance is calculated only using checklist method when more sophisticated tools can be used.

  9. Section 2 • DISCUSSIONS & ANALYSIS

  10. I. Challenges and issues in the light of 1. Recent scams/scandals • Sathyam Scam • Thoshiba Scandal Japan • Olympus scandal Japan • Volkswagen Scandal Germany

  11. Challenges and issues in the light of…. 2. Investors Role • Insider trading • Lack of information • Minority Shareholders

  12. Challenges and issues in the light of…. 3. Corporate Mechanism • Board composition • Appointment of Board • Code of conduct • Voting system • Shareholders meeting • Whistle blower

  13. Challenges and issues in the light of…. 4. Human values • Commitment • Due diligence • Knowledge & expertise • Moral values

  14. II. Compliance with clause 49

  15. Extent of compliance with Disclosures Opinion survey

  16. Extent of compliance with Non mandatory provisions

  17. Challenges Issues Lack of Due Diligence Lack of training to independent directors Insider trading Inefficiency of external auditors Inefficient market Ineffective general body meetings Lack of moral values Role of minority shareholders Unequal balance of power Code of conduct Ineffective whistle blowing mechanism Voting system

  18. III. Opinion – corporate officials • Challenges – 5 point scale

  19. Result of ANOVA

  20. Result of Friedman Test

  21. Major Findings • Majority of newly listed companies comply with mandatory requirements of clause 49 • Significant number of companies doesnot follow clarity in disclosures especially related to code of conduct and whistleblower mechanism • Significant number of companies doesnot complies with non manadatory provisions of clause 49.

  22. Findings • Based on analysis of scams and scandals and role of investors, corporate mechanism etc four major challenges and eight issues are identified. • Test result shows that all challenges are equally important according to the opinion of corporate officials • There is significant difference in the ranking given to selected issues by corporate officials.

  23. Findings • Mean rank shows that lack of training to independent directors is the most severe issue followed by lack of efficient code of conduct. • Least severe issue to be addressed is less role of minority shareholders in general meetings.

  24. Strategic Plan • Voting rights for minority shareholders also • One nominee director by govt. • Women director should be an independent director • Training and evaluation of independent directors • Ethic programmes rather than ethic policy • Value circles • Strategic Model

  25. Areas For Further Research • Compliance of corporate governance- A comparitive analysis • Application of corporate governance models • Corporate governance practices and share prices • Code of conduct and corporate culture • Role of stakeholders in corporate governance • Shareholders share holding pattern and corporate governance

  26. References • Sanjay Bhayana ‘Corporate governance practices in India’, Regal publications, NewDelhi • Swami (Dr) Parthasarathy, , Corporate Governance principles, Mechanisms and practice, Biztantra, NewDelhi • (Dr) S . Singh , Corporate Governance, Global concepts and practices, Excel Books, New Delhi • http://onlinelibrary.wiley.com/doi/10.1111/j.1467-8608.2008.00543.x/pdf • https://www.boundless.com/management/textbooks/boundless-management-textbook/organizational-behavior-5/drivers-of-behavior-44/how-values-influence-behavior-230-7046/ • http://www.thehindubusinessline.com/iw/2009/01/18/stories/2009011850881400.htm

  27. THANK YOU

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