Business Ethics and Corporate Governance, Second Edition

REASONS FOR CORPORATE MISGOVERNANCE

For too long, Indian corporates have insulated themselves from wholesome developments evolving elsewhere. A closed economy, a sheltered market, limited need and access to global business/trade, lack of competitive spirit and a regulatory framework that enjoined mere observance of rules and regulations rather than realization of broader corporate objectives marked the contours of corporate management for well over 40 years, ever since we adopted a socialistic pattern of society.

Apart from forces militating against healthy and transparent governance is the fact that a vast majority of Indian corporates is controlled by promoter families which while owning a negligible proportion of share capital in their companies, ...