Purpose The purpose of this study is to construct a comprehensive Indian corporate governance index in light of the recently introduced Companies Act, 2013, which is further validated by analyzing its impact on the cost of equity of a firm. Design/methodology/approach Based on the hand-collected data from firms listed on S&P BSE 500 from 2001 to 2016, this index comprises seven equally weighted sub-indices, comprising a total of 43 corporate governance attributes. This index and the sub-indices have further been regressed with the cost of equity of a firm. Findings The results suggest a negative significant relationship between the overall corporate governance and the cost of equity. The study also suggests that among all the sub-indices, board composition predicts the cost of equity to a greater extent. Other than this, the audit committee sub-index has a negative significant association with the cost of equity. The findings imply that a well-governed firm enjoys ease of access to equity finance from the market. Originality/value The corporate governance index is based on the recent regulatory reforms introduced in India. The index, with certain changes suitable to the local context, can be applied to similar emerging economies as well. The causal relationship tested using this method is the first one done in India. This study adds to the domain of corporate governance literature with special focus on the construction of an index for an emerging economy.

Purpose The purpose of this paper is to examine the significance of gender diversity on corporate boards in India in the light of recent regulatory reform introduced in the Companies’ Act, 2013 which mandated the presence of at least one woman on the corporate boards of all the listed firms. Design/methodology/approach Based on a panel of 300 firm-year observations for 15 years from 2001 to 2015, regression analysis has been conducted to analyze the relation between gender-related variables of corporate boards with firm-specific financial characteristic, cost of equity (COE) and return on assets (ROA) of firms listed in CNX Nifty, a major financial market index of India. Findings The analysis indicates that boards with gender diversity explain a slightly more than 5.5 percent change in a firm’s COE and have a much higher impact of 45 percent on a firm’s ROA. The presence of female directors on the boards and their independence have a negative association with the COE, whereas the level of involvement of female directors on different committees has a positive association with the ROA. Practical implications The findings may help theorists in defining the right mix of female on the corporate boards in an emerging economy. Also, by taking input from the findings, regulators and industry can formulate policies to foster gender diversity on corporate boards in India. Originality/value This study considers the recent regulatory norm introduced in India. This issue has still not been discussed and analyzed by researchers in India. It attempts to explain the impact a gender diverse board can make on a firm’s performance. It also makes valuable recommendations to improve the norms intended to more effectively foster gender diversity on corporate boards in India.

Purpose This paper aims to explore the relationship of corporate governance attributes with cost of capital and firm performance. This paper also tries to find some widely discussed corporate governance attributes that hold importance in Indian context. Design/methodology/approach This paper is based on literature survey of 241 research papers, both conceptual and empirical, which covers literature published over a period of three decades, ranging from 1986 to 2016. The literature includes those papers that studied the relation of corporate governance with cost of capital and firm performance, also it includes those research papers which discuss the evolution and development of corporate governance as a concept. Findings This study finds that the idea of corporate governance has shifted from the protection of shareholders’ rights to a firm’s need for survival. There is a dearth of literature studying the relation between corporate governance and cost of capital in India. It is observed that cost of capital is a better measure than Tobin’s q in Indian context. Research limitations/implications This paper mainly focuses on themes like cost of capital and firm performance therefore, some other firm-related measures which are also influenced by corporate governance may have been ignored. Originality/value This study enhances the literature on corporate governance especially in Indian context. Empirically testing the framework developed in this study will help in identifying the significance of various corporate governance attributes in Indian context.

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