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Past Issue • Jan-Mar 2014

Corporate Governance in India: A Context for Steering Change

In this introductory essay, Sanjay Kallapur, Professor of Accounting at the Indian School of Business, places recent legislation and reform in corporate governance in India against the backdrop of international regulatory frameworks and relevant research studies. The Companies Act 2013 has gone a long way in improving the enforcement regime for breach of faith on the part of company management and independent directors. But the balancing of multiple stakeholder interests that the legislation mandates also introduces irreconcilable tensions into the very purpose and viability of the corporation.

This issue of ISBInsight provides a perspective on the corporate governance agenda in India in the wake of the new Companies Act that became law after the President’s assent on August 29, 2013. This article places our authors’ contributions in the context of international developments and research in the area. Several themes emerge from these articles. Mirza Baig (“Redefining India’s Governance Landscape”) explains how with the new provisions, Indian laws measure up to the best in the world. In particular, the Act strengthens the provisions regarding independent directors, as Asish Bhattacharyya also points out (“The Corporate Affairs Perspective”). And yet, as Baig points out, India is still considered below par in terms of the culture, as opposed to the legal framework, for corporate governance. Improving this perception is key not only to enhancing India’s attractiveness as a destination for foreign capital, but also to increasing competitiveness and growth by ensuring that capital and resources are allocated to their most productive uses.

ABOUT THE AUTHORS

  • Sanjay-Kallapur

    Sanjay Kallapur

    Professor of Accounting at the Indian School of Business, and an independent director on the Board of the Life Insurance Corporation of India.
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