Business Ethics and Corporate Governance, Second Edition

EFFECTS OF MONOPOLY ON CORPORATE GOVERNANCE

Examples abound where due to deliberate state policy and with little objective regulation, politically influential family-owned companies emerge as winners thwarting even the limited competion. Managements are not interested to put in place any corporate governance practices. Their focus is distorted away from commercial objectives towards political influence. Political favours weaken management and accountability. There is lack of transparency, so there is reduced incentive to invest and increased risk in equity markets. The tug-of-war between the Ambani brothers in the recent past and allegations of corporate misgovernance in India’s leading and the most successful industrial conglomerate illustrates ...