Business Ethics and Corporate Governance, Second Edition

THE COMPANIES ACT, THE HARBINGER OF CORPORATE GOVERNANCE

In India, until recently company legislation has been the main instrument to promote corporate governance. Tracing its origins to the mid-nineteenth century, and thereafter closely following similar developments in the United Kingdom, the Companies Act 1956 was a consolidating legislation with far reaching impact that significantly altered the structure of corporate management in India. Subsequently, incorporating recommendations of the Bhabha Committee, this Act legislated, inter alia, the abolition of the system of managing agents, an institution that had served the country truly and well during the early days of corporatization and more significantly industrialization, but fallen into ...