Business Ethics and Corporate Governance, Second Edition

ROLE OF SECuRITIES MARKET IN ECONOMIC GROwTH

In the words of G. N. Bajpai, former SEBI Chairman: ‘It is the securities market which reflects the level of corporate governance of different companies and accordingly allocates resources to best governed companies. If the securities market is efficient, it can penalise the badly governed companies and reward the better-governed companies. Hence, not only the corporate governance standards need to improve, but also efficiency and efficacy of securities market need to improve so that the resources are directed to the deserving companies, which can really boost economic performance. The securities market cannot make best allocation of resources if the standards of corporate governance are not followed ...