Since the late 1990s, significant efforts have been made by the Indian Parliament, as well as by Indian corporations, to renovate Indian Corporate Governance. The present regime in Indian provides for both voluntary and mandatory requirements . For instance, Voluntary Guidelines by Ministry of Corporate Affairs are present and at the same time, for listed companies, the vast majority of Clause 49 of the listing agreements requirements is obligatory. The voluntary guidelines have set a standard in India for the Corporate Governance practices in the Indian corporations, and hopefully the corporate world will make the best use of it. Efforts have also been made made by the legislature to come up with new legislations and amend the existing ones. Resultantly, amendments relating to Corporate Governance are expected to be brought. It has been accepted many a times that India has one of the best Corporate Governance legal regimes but poor implementation together with socialistic policies of the pre-reform era has affected a lot.
Effective corporate governance enhances admission to external financing by firms, leading to greater investment as well as high employment and growth level. It has been. Good corporate governance...
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• Remove One-Size-fits-all approach Clause 49, which lays down role of the audit committee and role of board disclosure risk management, mentions compliance norms to be independent of the size of the company. This may not necessary yield the desired levels of compliance in India.
• Better effectiveness Medium term lock-in options (medium term stock options which are convertible only after 4-5 years or simply through contracts for the number of years of stay) for the CEO to prevent the CEO from acting in ways to gain short term gains from unethical governance.
• Training Program for new Directors In order to have a better clarity on the issues facing the business and the upcoming challenges in the industry, many companies could do more in terms of a formal and tailored induction program(which is a recommendation of the Narayana Murthy Report) for their new directors.
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