Corporate Governance in India: The Transition from Code to Statute

Varottil, Umakanth

doi:10.1007/978-3-319-51868-8_5

Cited by 4 publications

(5 citation statements)

References 17 publications

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“…Countries are motivated to adopt codes not only because they improve the corporate governance system by inducing efficiency, but also because they seek to obtain legitimacy by incorporating widely accepted norms regardless of their suitability or level of implementation. For example, the pressures of globalization and the urge to adhere to ‘international standards’ have led countries to adopt governance standards that are similar to those in countries from which they seek to attract foreign investment (Varottil, 2017). Adding to these pressures is the focus of multilateral institutions such as the International Monetary Fund, the World Bank and the OECD to promote global governance standards on a broader basis (Jordan, 2005).…”

Section: Proliferation Of Corporate Governance Codes As a Means Towarmentioning

confidence: 99%

“…These rather specific factors that led to the emergence and continuance of the voluntary code in the UK are arguably not present in other jurisdictions to which it has been transplanted (Varottil, 2017). First, unlike the UK that has relied strongly on informal mechanisms and traditions as means of compliance through ‘soft law’, several other countries depend entirely on mandatory rules in the form of ‘hard law’.…”

Section: Self-regulation In the Concentrated Shareholding Contextmentioning

confidence: 99%

“…Here, it would be useful to consider the reasons why UK has epitomized the voluntary code of corporate governance and why other countries may find it difficult to emulate the extent of adherence that the UK has demonstrated with the code (Varottil, 2017). First, voluntary codes have represented the hallmark of regulating the corporate sector in the UK.…”

Section: Self-regulation In the Concentrated Shareholding Contextmentioning

confidence: 99%

“…Moving to self-regulation, a voluntary code operating on a 'comply-or-explain' basis can ensure sufficient adherence only if certain factors are present in the jurisdiction where it is applied. These include a legal tradition that accepts the power of 'soft law', a pool of institutional investors that plays an active monitoring role on the basis of disclosures made by issuer companies regarding their compliance (or explanations of non-compliance) and a robust legal system with strong foundations for protection of shareholder rights (Varottil, 2017). The presence of these conditions in the UK has naturally led to the popularity of corporate governance codes in that jurisdiction.…”

Section: Introductionmentioning

confidence: 99%

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Proliferation of corporate governance codes in the backdrop of divergent ownership structures

Varottil

2018

Competition & Change

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In the backdrop of the convergence–divergence debate, the goal of this article is to examine the proliferation of corporate governance codes in the light of a single factor, namely varying corporate ownership structures across countries. While such codes emanated and became popular in the United Kingdom where companies largely display dispersed shareholding, the concept has been disseminated to countries that carry considerably different ownership structures, i.e. mainly concentrated shareholding. This is bound to give rise to incongruities in the implementation of these codes. In order to enunciate the claim made above, the article will consider two aspects that convergence advocates have focused on, namely (i) shareholder empowerment and (ii) self-regulation. For example, corporate governance codes place considerable emphasis on the structure and independence of the boards of directors of companies as a means to ensure shareholder protection. While this approach is meant to produce results in companies with dispersed shareholding, the same cannot be said of companies with concentrated shareholding where the empowerment of shareholders through director independence or other means would only embolden the already dominant controlling shareholders. Moving to self-regulation, a voluntary code operating on a ‘comply-or-explain’ basis can ensure sufficient adherence only if certain factors are present in the jurisdiction where it is applied. Relying upon available empirical evidence, this article finds that use of self-regulation in voluntary codes of corporate governance may generate different results depending upon the ownership structures of companies, thereby exhibiting signs of divergence on this count.

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Section: Proliferation Of Corporate Governance Codes As a Means Towarmentioning

confidence: 99%

Section: Self-regulation In the Concentrated Shareholding Contextmentioning

confidence: 99%

Section: Self-regulation In the Concentrated Shareholding Contextmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Proliferation of corporate governance codes in the backdrop of divergent ownership structures

Varottil

2018

Competition & Change

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“…media, businesspeople, politicians, and NGOs) results in practices that differ quite markedly from the situation claimed in 'convergent' notions of corporate governance, even when the latter are formally adopted in codes, standards, and regulations. Those standards and regulations may suggest theoretical adherence to a 'convergent' norm but, as a consequence of their interpretation and implementation in specific cultural, legal, economic, and political contexts, it is concluded that their practical operation betrays divergence (Aguilera and Jackson, 2010;Branson, 2001: 324;Gilson, 2001: 329;Larsson-Olaison, 2014;Sikavica and Yoshikawa, 2012;Varottil, 2017;Yoshikawa and Rasheed, 2009). Rejecting claims of a movement towards convergence that are considered to lack support (Aguilera and Jackson, 2010;Bratton and McCahery, 1999;Campbell and Pedersen, 2014;Cuomo et al, 2016: 234;Gilson, 2001; Gospel and Pendleton, 2003;Goyer, 2011;Larsson-Olaison, 2014), advocates of divergence contend that the challenge for students of comparative corporate governance is to pay closer attention to nuanced descriptions of the operation, and (relative) strengths and capacity for transplantation of norms, systems, rules, regulations, structures, and processes in prevalent economic and political orderings, and also in relation to governance processes within organizations (Campbell and Pedersen, 2014;Gelter, 2009;Goyer, 2011;Jackson, 2000;Jacoby, 2008;Keay and Zhao, 2015;Morgan and Whitley, 2012;Rasheed and Yoshikawa, 2012).…”

Section: Introductionmentioning

confidence: 99%

Performativity and convergence in comparative corporate governance

Veldman¹,

Willmott²

2019

Competition & Change

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We engage with the convergence/divergence debate in the comparative study of corporate governance by commending a nuanced formulation of the convergence thesis. Directing attention to the precarious constitution and adoption of knowledge claims about corporate status and architecture in the field of corporate governance we suggest that the study of comparative corporate governance might usefully incorporate consideration of claims about corporate governance as potentially performative statements that function to stabilize particular ideas of status and architecture of the modern corporation with substantive outcomes for political economy, thereby influencing the shape of the institutions comprising the field of corporate governance. We conclude that the predominantly epistemological preoccupations of participants in the convergence/divergence debate could be usefully refined and supplemented by giving closer attention, empirical as well as theoretical, to the relation between performativity, convergence/divergence, and political economy.

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Assessing the Quality of Bank Boards: Evidence from the Indian Banking Industry

Bhatia

Gulati

2020

Margin: The Journal of Applied Economic Research

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The article employs hand-collected data on 14 board characteristics for the period from 2004–2005 to 2016–2017 to empirically assess the evolution of board governance practices in the Indian banking industry. For this, we construct a comprehensive index for board governance and four sub-indices of board effectiveness. The study sheds light on how various characteristics of Indian bank boards have evolved over time. The mean value of the board index rose 33 per cent during the period of analysis, indicating a significant improvement in board governance practices of banks. The improvement in practices is primarily due to a considerable transition in the sub-dimensions of board structures and board independence. The transition in board structure results from the larger number of banks appointing different persons as CEOs and chairpersons; the change in board independence has principally emanated from the larger number of banks providing training to their independent directors, declarations and conducting separate meetings. Yet, our findings recommend room for further improvement in various aspects of board governance, including appointment of non-executive chairpersons, female directors and board independence. JEL Classification: G21, G34, C23

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Corporate Governance in India: The Transition from Code to Statute

Cited by 4 publications

References 17 publications

Proliferation of corporate governance codes in the backdrop of divergent ownership structures

Proliferation of corporate governance codes in the backdrop of divergent ownership structures

Performativity and convergence in comparative corporate governance

Assessing the Quality of Bank Boards: Evidence from the Indian Banking Industry

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