A Study on Corporate Governance Disclosures in Selected Housing Finance Companies in India

Every company across the globe today focuses on basic principles of good corporate governance for performing efficiently and to enhance their valuation in the market. A good corporate can generate the source of attracting capital, foreign investment, investors’ trust, confidence, and also take advantage of the vibrant stock market. Corporate governance is a code of business conduct and ethics that would greatly benefit the companies to thrive and prosper. The outcome of the literature review was that even though the disclosures are made mandatory, there is a large variation in the quality of corporate governance disclosure practices adopted by companies listed in different countries. Empirical research done earlier has also proved that good corporate governance practices being followed enhances the firm value. Housing finance companies face unique corporate governance challenges due to myriad reasons like ownership structures, lack of transparency, and insufficient checks on inappropriate activities. Despite the ‘corporate governance revolution’, there exists no universal benchmark for the effective level of disclosure and transparency. Corporate governance practices followed in business firms are communicated through the corporate governance section of annual reports. clause 49 of the listing agreement sets a detailed corporate governance provision to be followed by listed companies in India. This study aimed at evaluating the governance practices in Housing Finance Companies against disclosure requirements of clause 49. Housing Finance companies that are listed in the NSE are taken into consideration as the sample for the study. Kendall’s coefficient of concordance is used for determining the degree of association among several (k) sets of ranking of N objects or individuals.

Examination of Historical Advancement of Corporate Governance in India– Contemporary Issues and Way Forward

In the Era of Globalised world, the importance of Fair Corporate Governance policies has been recognized by different countries. From collapse of Wallpaper Group Coloroll in UK, Enron Scandal in US and Satyam Scam in India, all of these countries have witnessed some of the largest Corporate Scams. With the help of good Corporate Governance Policies, a country can protect its economy and investment made therein. It encourages shareholders to invest in capital market and ensure safety of their investment. In India, the corporate governance and its basic pillars on which governance stands i.e. Transparency, Accountability and Fairness, were introduced through Clause 49. This was done only after it was recommended by the Kumar Mangalam Committee. Yet, subsequently the shocking event of Satyam Scam & other Corporate Governance failure continues to hit Indian economic on various occasions. This paper will analyse the past experience of some of the famous scams happened in India specifically in past one decade and the lessons learnt thereby. The paper furthermore discusses the current legal issue and the challenges faced by Corporate Governance practices in India. Keywords - Corporate Governance, Corporate Scam, SEBI.

Issues in separating Chairman and CEO/MD roles in Family Firms: Evidence from India’s SEBI reform

This paper analyzes the issues of implementing the new corporate governance code Securities and Exchange Board of India (SEBI), which is Contract agreement reforms (Clause 49) enacted in 2018.This code has ordered Indian companies to separate the role of chairman and chief executive officer (CEO)/managing director(MD)in family firms. Not only that more severe penalties were introduced in 2020 to expand the efficacy of this enactment, the SEBI had also recommended certain companies, in the new contract agreement reform, to implement it by October 01, 2019.There exist many problems on implementation of this reform in India. The separation between the position of Chairman and CEO/MD, which may lead to more independent boards, will provide the essential checks and balances over management’s performances. But, in most Indian promoter-led companies, the posts of chairman and CEO/MD are interwoven. The promoters say that the committee did not recommend that the two posts be separated, and hope the order gets deferred for 2-3 years.A qualitative research analysis is conducted focusing on the implications of this reform on family businesses and their managing boards. Hence, this paper will analyze the present conditions, trends, and future challenges from a theoretical as well as practical perspective. Keywords:Family firms, corporate governance reforms, separated Chairman and CEO/MD, SEBI, India.

Disclosure of Corporate Voluntary Board Governance Practices in India

The present paper deals with the current as well as hotly debated issue of increasing attention on the extent of governance practices followed by the corporates. In particular, it investigates the disclosure of sound board practices followed by the top listed companies in India by relying upon a Voluntary Board Governance Disclosure Index (VBGDI) developed in the study. The index has been constructed by following the requirements stated under Revised Clause 49 of the Listing Agreement (2004) and Corporate Governance Voluntary Guidelines (2009). In addition, the study has covered two time points in its dataset in order to examine an improvement in the disclosure of board governance practices by the corporates from the time point 1 (2005-06) to the time point 2 (2009-10). The testing has been performed by means of paired samples t-test and Wilcoxen signed rank test (for robustness testing) which has reported significant improvement for some selected board practices in particular and for overall disclosure score as a whole. Overall, the analysis suggests that the corporate voluntary disclosure of the board governance practices has been improved (but only for some items), however, there are certain influential practices which should be covered by the companies in the ambit of their governance frameworks so that the level of governance standards in India can be upraised. On the whole, it suggests the companies to incorporate more board governance practices in the spectrum of their governance disclosures.

The Impact of Corporate Governance Variables on Earnings Management in India

The dawn of 21st century has marked the plunge of numerous colossal enterprises across the continent that not only quivered the business environment of economies but also shackled the investor confidence. This phenomenon which has been the reason for these losses is termed as Earnings management. A series of amendments paving way for stringent law to ensure better transparency and accountability have been put into practice to restrain earnings management. In India, in the year 2006 major corporate governance reform was introduced by making revised Clause 49 of listing mandatory. The Clause has a set of mandatory and non-mandatory guidelines. The present work has been taken to explore the relationship between the non-mandatory corporate governance variables as per revised Clause 49 (2006) variables and discretionary accrual a proxy of earnings management in Indian context. The study period is 2007-2014 and a sample of 209 BSE listed companies has been taken. These corporate governance variables are handpicked from the annual reports of 209 companies. In total 1463 annual reports are scanned for the purpose of extracting variables of this study. The study revealed that non-mandatory variables such as remuneration committee and independent directors along with control variables such as firm size are significant in reducing the instances of earnings management. The study fills the literature gap as empirical studies examining the relationship between earnings management and corporate governance in the Indian context are limited.

A Comparative Study on Corporate Governance Standards and Practices with Special Reference to Indian Banking Industry

<div><p><em>The vital constituent of an economy are Banks. The significance of banking sector is highlighted by the fact that it is an internationally regulated industry and the banks are under the purview of financial regulators of the country. It is of pivotal significance that the banks have robust corporate governance. A new clause 49 was introduced by SEBI in the listing agreement before a decade mentioning the principles of corporate governance to be followed by the listed companies. In the following years SEBI revised clause 49 several times after incorporating the recommendation of various committees. After taking into account the various trends and factors related to corporate Governance the topic entitled. "A comparative study of corporate standards and practices with special reference to Indian Banking Industry" has been drafted to assess the structure and processes of corporate governance followed by select banks in India and their effectiveness in the content of substance and quality of reporting of corporate governance activities in the annual reports. The study also looks in to the state of compliance of key governance benchmarks in the select banks and offers suggestions to accomplish better governance standards. </em></p></div>

Ownership Structure and Corporate Performance in India

The ownership structure of a publicly held Corporation is one of the internal mechanisms of corporate governance. Insider ownership is one of the internal controlling mechanisms that could theoretically reduce agency costs. Earlier researcher has investigated the effects of insider ownership on firm performance. But we have attempted to add few more dimensions to it. Firstly, earlier studies did not attempt to study this relationship after the implementation of revised corporate governance code in 2006 in India and after the changes in the disclosures of insider ownership as per the clause 49 of the listing agreement. Secondly, earlier studies did not take into account the time lag for the studies on Indian markets. We have attempted time lag studies using panel data on the Indian Markets using MBVR ratio as a performance measure. The result shows that corporate performance is significantly influenced by insider ownership. Hence corporate governance issues needs to be dealt with great care.Â

Director’s remuneration and correlation on firm’s performance

Purpose – The purpose of this paper is to explore the impact of directors’ remuneration on the firm’s intrinsic and extrinsic value. Design/methodology/approach – The paper provides a brief review of the literature on directors’ remuneration and identifies the current knowledge on the relationship between profit sharing or directors’ remuneration and the firm’s performance. In addition, correlation analysis between the directors’ compensation and various parameters measuring the firm’s performance is done. Findings – From an investor’s viewpoint, the performance indicators indicated no significant relation of the increase in the firm’s performance with the increase in directors’ remuneration. But, from the accounting viewpoint, there exists a positive correlation between the two. Therefore, the directors’ remuneration adds to the intrinsic value of the firm, but does not contribute significantly to the extrinsic value of the firm. Research limitations/implications – Future research could encompass a larger sample of companies. Also, a comparison could be done for the companies for periods before and after the modification of Clause 49 post-Satyam fiasco. The present study is done after a short period of the modification to the Clause 49. Originality/value – The study provides a unique examination of remuneration of the board of directors and the firm’s performance. It studies the impact of the directors’ remuneration and its impact on firm’s performance. The study encompasses an exhaustive analysis for the emerging market, namely, India. The research studies 40 companies, which are unique from each other and explores the relation. It explores four parameters studying both the intrinsic and extrinsic values of the firm.