Corporate Governance and the Role and Responsibility of Board of Directors in India with Special Focus on Independent Directors

2015 ◽  
Author(s):  
G. S. Popli ◽  
Rupina Popli
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Independent Directors ◽  
Special Focus

Corporate governance failure at Ricoh India: rebuilding lost trust

2018 ◽  
Vol 8 (4) ◽  
pp. 1-20
Author(s):  
Sonu Goyal ◽  
Sanjay Dhamija
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Multinational Corporations ◽  
Audit Committee ◽  
Governance Structure ◽  
Special Focus ◽  
Corporate Governance Structure ◽  
Content Type ◽  
External Auditors ◽  
The Board Of Directors

Subject area The case “Corporate Governance Failure at Ricoh India: Rebuilding Lost Trust” discusses the series of events post disclosure of falsification of the accounts and violation of accounting principles, leading to a loss of INR 11.23bn for the company, eroding over 75 per cent of its market cap (Financial Express, 2016). The case provides an opportunity for students to understand the key components of corporate governance structure and consequences of poor corporate governance. The case highlights the responsibility of the board of directors, audit committee and external auditors and discusses the changes required in the corporate governance structure necessary to ensure that such incidents do not take place. The case also delves into the classic dilemma of degree of control that needs to be exercised by the parent over its subsidiaries and freedom of independence given to the subsidiary board, which is a constant challenge all multinationals face. Such a dilemma often leads to the challenge of creating appropriate corporate governance structures for numerous subsidiaries. Study level/applicability The case is intended for MBA courses on corporate governance, business ethics and also for the strategic management courses in the context of multinational corporations. The case can be used to develop an understanding of the essential of corporate governance with special focus on the role of the board of directors, audit committee and external auditors. The case highlights the consequences and cost of poor corporate governance. The case can also be used for highlighting governance challenges in the parent subsidiary relationship for multinational corporations. The case can be used for executive training purposes on corporate governance and leadership with special focus on business ethics. Case overview This case presents the challenges faced by the newly appointed Chairman Noboru Akahane of Ricoh India. In July 2016, Ricoh India, the Indian arm of Japanese firm Ricoh, admitted that the company’s accounts had been falsified and accounting principles violated, leading to a loss of INR 11.23 bn for the financial year 2016. The minority shareholders were agitating against the board of directors of Ricoh India and were also holding the parent company responsible for not safeguarding their interest. Over a period of 18 months, Ricoh India had been in the eye of a storm that involved delayed reporting of financials, auditor red flags regarding accounting irregularities, a forensic audit, suspension of top officials and a police complaint lodged by Ricoh India against its own officials. Akahane needed to ensure continuity of Ricoh India’s business and also act quickly and decisively to manage the crisis and ensure that these incidents did not recur in the future. Expected learning outcomes The case provides an opportunity for students to understand the key components of corporate governance structure and consequences of poor corporate governance. More specifically, the case addresses the following objectives: provide an overview of corporate governance structure; highlight the role of board of directors, audit committee and external auditors; appreciate the rationale behind mandatory auditor rotation; appreciate the consequences of poor corporate structure; explore the interrelationship between sustainability reporting and transparency in financial disclosures of a corporation; understand management and governance of subsidiaries by multinational companies; and understand the response to a crisis situation. Supplementary materials Teaching notes are available for educators only. Please contact your library to gain login details or email [email protected] to request teaching notes. Subject code CSS 11: Strategy.

M. Video-Eldorado: improving corporate governance to increase efficiency

2021 ◽  
pp. 69-71
Author(s):  
A.V. Butov
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
General Meeting ◽  
Annual General ◽  
Independent Directors ◽  
Annual General Meeting ◽  
The Board Of Directors ◽  
Increase Efficiency

M. Video reports that the company’s board of directors has decided to hold an annual general meeting of shareholders on May 7, 2021. As part of the implementation of measures to improve corporate governance, the Board of Directors approved the list of candidates for the new composition of the Board. If appropriate decisions are made by the shareholders, the share of independent directors in the board of directors will increase to one third.

Online transparency and corporate governance in Spanish governmental agencies

2019 ◽  
Vol 43 (4) ◽  
pp. 653-675 ◽  
Author(s):  
Vicente Pina ◽  
Lourdes Torres
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Previous Literature ◽  
Independent Directors ◽  
Political Dimension ◽  
Content Type ◽  
Eu Directive ◽  
The Board Of Directors ◽  
Practical Implications ◽  
Spanish Legislation

Purpose Online transparency has become a tool to increase legitimacy and trust in governments. The purpose of this paper is to study the online transparency of Spanish Central Government agencies and analyze whether their corporate governance (CG) structures influence their online transparency. Design/methodology/approach The information used for building an online transparency index and about the board of directors has been collected from the websites of the 168 agencies and from their statutes and activity reports. Ordinary least squares analysis is used. Based on a previous literature review and the requirements of the EU Directive and Spanish legislation, 108 items included in the websites have been analyzed. Findings The average information displayed through the website agencies is significantly less than the information considered as relevant in previous literature and in the Spanish legislation. The highest values are presented by the technical dimensions and the lowest by the organizational/political dimension. The presence of independent directors and women on the boards of directors are revealed as the most important explanatory factors of online transparency. Practical implications Practical implications to improve online transparency are related to the organizational/political dimension – including the positions and CVs of members of governing bodies, minutes, etc. and to the presence of independent directors and, to a lesser extent, of women, on the board of directors. Originality/value The contribution of this paper is the identification of some online transparency determinants in public entities under the same general legal framework. This is the first paper that analyzes the relationship between online transparency and CG in public agencies.

scholarly journals Corporate Governance Independence in the Board of Directors and The Firms Financial Performance: Empirical Analysis of Cement Sector Firms Listed on Pakistan Stock Exchange (PSX)

2021 ◽  
Vol 09 (01) ◽  
pp. 01-24
Author(s):  
Muhammad Noman Ansari ◽  
◽  
Dr. Sayed Fayaz Ahmed
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Board Of Directors ◽  
Stock Exchange ◽  
Agency Cost ◽  
Independent Directors ◽  
Return On Assets ◽  
Return On Equity ◽  
Board Committees ◽  
The Board Of Directors

The corporate governance measures emphasize on presence of independence of the board of directors to bring objectivity and reducing the agency cost; whereas the institutions have the ability, skills and time to supervise the activities of the management and channelize it to better financial performance. The objective of this study is to explore the effect of independence of the board of directors on the financial performance of the firms. The independence was gauged by number of independent directors and non-executive directors, chairing of board committees by independent directors, institutional holding in the firm, and presence of institutional directors on the board. The financial performance of the firm is gauged using the return on equity (ROE) and return on assets (ROA). The corporate governance and financial performance data comprising of 75 firm years from 2014 to 2018 of the firms listed in the cement sector of the Pakistan Stock Exchange (PSX) were selected. GLM regression was performed to study the relationship between the variables. The results suggest that the majority of independence on the board of directors do not affect the financial performance of the firm; the independence in the board committees negatively affects the financial performance, whereas the presence of institutional holding and director in the firm does not have any effect on the performance of the firm. The study will provide a basis for future studies to find the association that independence can bring objectivity, reduce agency cost, and affect the performance of the firm.

scholarly journals The influence of cultural values on the board of directors: Lessons from five corporations

2012 ◽  
Vol 9 (4-2) ◽  
pp. 221-229 ◽  
Author(s):  
Elsa Satkunasingam ◽  
Aaron Yong ◽  
Sern Cherk
Keyword(s):  
Corporate Governance ◽  
Cultural Values ◽  
Board Of Directors ◽  
Senior Management ◽  
Independent Directors ◽  
Board Members ◽  
Differences Of Opinion ◽  
The Board Of Directors ◽  
Code Of Corporate Governance

The Malaysian Code of Corporate Governance 2000 emphasises the monitoring role of the Board of Directors, especially that of independent directors. It has not however taken into account the cultural values in Malaysia which do not encourage differences of opinion or criticisms and has failed to provide sufficient safeguards for directors to exercise their role effectively. As a result, it is relatively easy for dominant Chairmen or CEOs especially in government-linked companies or CEO dominated companies to control the Board or senior management with very little opposition. This paper will discuss several incidences of financial mismanagement in companies caused by dominant directors with very little opposition from the rest of the board. It will highlight that the law has to take cultural values more seriously in order to equip the Board and especially independent directors with the ability to challenge dominant Board members.

Concentrated Stock Ownership and Business Development: Empirical Evidence from Russian Companies

2007 ◽  
pp. 84-97
Author(s):  
T. Dolgopyatova
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Large Scale ◽  
Corporate Control ◽  
Business Development ◽  
Stock Ownership ◽  
Special Focus ◽  
State University ◽  
Large Scale Survey ◽  
The Russian Federation

The paper describes composition of stock ownership in Russian companies with particular attention to its concentration and effects on corporate control. Special attention is paid to business integration as important background for ownership consolidation. The paper analyzes intra-corporate relations among main actors of corporate governance and functioning of its internal tools with special focus on Board of Directors’ composition and role. The correlation between the degree of concentration and companies’ performance and modernization activities is also discussed. The research is based on large-scale survey of 822 joint-stock companies in industry and communications conducted in 2005 in 64 regions of the Russian Federation. The survey was organized within the joint Japanese-Russian project that is being implemented by scholars from the State University - Higher School of Economics and Hitotsubashi University.

scholarly journals Independent directors? Supervisors? Who should monitor China’s boards?

2006 ◽  
Vol 3 (2) ◽  
pp. 142-147
Author(s):  
Margaret Wang
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Effective Model ◽  
Independent Directors ◽  
Republic Of China ◽  
American Model ◽  
The Board Of Directors ◽  
Supervisory Boards ◽  
German Model ◽  
Anglo American

After the collapse of a number of well-known companies such as Enron and WorldCom, there has been much debate over this is the most effective model of corporate governance in monitoring the board of directors from misconduct: the Anglo-American model of independent directors or the German model of supervisory boards. Most countries have chosen to adopt one either the Anglo-American or the German model. However, the People’s Republic of China (“China”) has adopted both models of corporate governance. This paper seeks to explore the differences between the two models as they apply in China. Further, it examines the challenges which these two models face with regard to their implementation. Finally, an evaluation will be made to ascertain whether the two models encounter the same problems and whether either or both of these two models would be able to effectively monitor Chinese boards.

scholarly journals On the specifics of corporate governance in Iran and the Middle East

2013 ◽  
Vol 10 (3) ◽  
pp. 49-62 ◽  
Author(s):  
Udo C. Braendle ◽  
Alireza Omidvar ◽  
Ali Tehraninasr
Keyword(s):  
Corporate Governance ◽  
Middle East ◽  
Board Of Directors ◽  
Transition Economies ◽  
Status Quo ◽  
Independent Directors ◽  
Control Environment ◽  
Mena Region ◽  
Institutional Infrastructure ◽  
The Status

Corporate Governance (CG) is not a new concept for the transition economies of the Middle East, but corporate governance is especially important since these economies do not have the long-established institutional infrastructure to deal with corporate governance issues. This article is presenting the results of our survey analyzing the status quo of Corporate Governance in Iranian companies. The survey questions cover aspects of Corporate Governance awareness, board of directors, control environment, transparency and shareholder- as well as stakeholder rights. We find several specifics that apply to other countries in the MENA region too. Empowering shareholders and stakeholder, offering Corporate Governance trainings and case studies in the region as well as establishing a culture of independent directors is the way forward.

scholarly journals Ownership structure, board of directors and firm performance: evidence from Taiwan

2019 ◽  
Vol 19 (1) ◽  
pp. 189-216 ◽  
Author(s):  
Mao-Feng Kao ◽  
Lynn Hodgkinson ◽  
Aziz Jaafar
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Board Of Directors ◽  
Ownership Structure ◽  
Firm Value ◽  
Listed Companies ◽  
Independent Directors ◽  
Data Set ◽  
Content Type ◽  
Listed Firms

PurposeUsing a data set of listed firms domiciled in Taiwan, this paper aims to empirically assess the effects of ownership structure and board of directors on firm value.Design/methodology/approachUsing a sample of Taiwanese listed firms from 1997 to 2015, this study uses a panel estimation to exploit both the cross-section and time–series nature of the data. Furthermore, two stage least squares (2SLS) regression model is used as robustness test to mitigate the endogeneity issue.FindingsThe main results show that the higher the proportion of independent directors, the smaller the board size, together with a two-tier board system and no chief executive officer duality, the stronger the firm’s performance. With respect to ownership structure, block-holders’ ownership, institutional ownership, foreign ownership and family ownership are all positively related to firm value.Research limitations/implicationsAlthough the Taiwanese corporate governance reform concerning the independent director system which is mandatory only for newly-listed companies is successful, the regulatory authority should require all listed companies to appoint independent directors to further enhance the Taiwanese corporate governance.Originality/valueFirst, unlike most of the previous literature on Western developed countries, this study examines the effects of corporate governance mechanisms on firm performance in a newly industrialised country, Taiwan. Second, while a number of studies used a single indicator of firm performance, this study examines both accounting-based and market-based firm performance. Third, this study addresses the endogeneity issue between corporate governance factors and firm performance by using 2SLS estimation, and details the econometric tests for justifying the appropriateness of using 2SLS estimation.

scholarly journals The Relationship between Corporate Governance Characteristics and Earnings Quality---Takes the IT Industry of China Listed Companies as a Sample

2021 ◽  
pp. 77-86
Author(s):  
Chih-Yi Hsiao ◽  
Qing-Yuan Zhang ◽  
Hao-Nan Huang ◽  
Wei-Xun Xi
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Earnings Quality ◽  
Financial Structure ◽  
Listed Companies ◽  
Independent Directors ◽  
It Industry ◽  
Efficient Operation ◽  
Good Corporate Governance ◽  
The Board Of Directors

Since the meeting of China Securities Regulatory Commission in 2020 once again emphasized the issue of earnings quality of corporate governance, this paper intends to study this issue from different perspectives. This study takes the IT industry of China's A-share listed companies from 2015 to 2019 as the sample, and makes an empirical analysis with the fuzzy set/ Qualitative Comparative Analysis (fs/QCA). The results show that the companies with large scale and good corporate governance concept, poor financial structure but with the assistance of external experts, high salary and high proportion of independent directors have relatively high earnings quality. According to the above research results. According to the findings, we put forward the following suggestions. For enterprises, good corporate governance concept and the concept of integrity are very important, but there must be efficient operation of the board of directors in order to play the role of corporate governance. Therefore, the size of the board of directors should not be too large, but it can be adjusted flexibly depends on whether the required professionals are enough. In addition, enterprises with poor financial structure should rely on the assistance of professional managers, rather than using earnings manipulation to obtain short-term benefits. For the regulators of listed companies, the procedures of independent directors’ selection should be more strictly supervised, so as not to make the setting of independent directors become mere formality. For investors, we should always pay attention to the corporate governance, and announce the disclosure of real-time information about directors, supervisors and senior executives, to prevent losses caused by investment misjudgment.

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