Content area
Full Text
Introduction-corporate governance and its need
Corporate governance provides the guiding principle as to how the company can be controlled or directed in a manner which can fulfill its goals and objectives. It prescribes certain guidelines that adds to the value of the company and is also advantageous for all stakeholders in the long term. Stakeholders in this case would include everyone ranging from the board of directors, management, shareholders to customers, employees and society (Thomson, 2009). In short, corporate governance refers to the set of principles by which acompany is governed and by which board of directors ensures evenhandedness, transparency and accountability in a company’s relationship with all its stakeholders financiers, customers, management, employees, government and the community.
Good corporate governance standards are essential for the integrity of corporations, financial institutions and markets and have a bearing on the growth and stability of the economy (NSE India, 2013). For a company to be a successful entity, it is vital that corporation should concentrate on both economical and social aspect. It needs to be fair with producers, shareholders, customers, etc. Corporations do have the primary responsibilities toward the governance so that they shall not hamper the society in any manner. Whistleblowers Protection policy would be an efficacious tool for corporate governance, as it will make the corporate accountable to the common mass, which would certainly help the society to nurture.
As the corporate governance does not only affect the companies’ growth, it has an tremendous effect on the society as well; thus, it is very crucial to look upon the policy adopted by Indian Legislature and to look upon the best practices prevailing in the foreign jurisdiction to curb such malfunctioning.
Corporate governance in India
Confederation of Indian industry has been working for the corporate governance movement in India, for many years. In April 1998, Task Force report entitled “Desirable Corporate Governance: A Code” was released by them, which prescribed a series of voluntary recommendations regarding best-in class policies for corporate governance. It is true that most of the code prescribed by Confederation of Indian Industry was subsequently incorporated in Securities and Exchange Board of India’s (SEBI) Kumar Mangalam Birla Committee Report and then “SEBI” vide its circular dated August 26, 2003 has amended the Principles...