Corporate Governance Practices in Listed State-owned Enterprises in India: An Empirical Research

Abstract

Corporate Governance (CG) refers to a system in which corporations are directed and controlled. The governance structure specifies the distribution of rights and responsibilities among different participants in the corporation and specifies the rules and procedures for making decisions in corporates. Governance provides the structure through which corporations set and pursue their objectives, while reflecting the context of the social, regulatory and market environment. Governance is a mechanism for monitoring the actions, policies and decisions of corporations. Governance involves the alignment of interests among the stakeholders. CG is an umbrella term. In its narrower sense, it describes the formal system of accountability of corporate directors to the owners of companies. In its broader sense, the concept includes the entire network of formal and informal relationships involving the corporate sector and the consequences of these relationships on society in general. The center objective of the paper is to create linkages between firm performance and governance practice in the listed SOEs in India. The present paper makes an attempt to compare the various CG variables of the listed SOEs for a period of five years ie 2012-13 to 2016-17. A detailed analysis of the 42 listed State Owned Enterprises (SOEs) in terms of board size, board meetings, board committees, board composition, independent directors, firm age, gender diversity has been compared. Finally conclusions are drawn from empirical analysis.

Impact of Corporate Governance on Financial Returns of Indian Listed Companies

“…But our findings do not support the hypothesis as we found positive coefficients of board size relating to both financial return measures though it is not statistically significant. Therefore, we conclude that board size positively affects firm performance (Kiranmai & Mishra, 2019) though it is not statistically significant. H2 and H3 propose that board meetings and board committees positively affect the financial return of selected companies.…”

“…The seamless effort during the board meetings and the subsequent follow-up of decisions taken show the level of commitment of the directors. In this context, Mishra and Kapil (2018) reported that the number of board meetings conducted by an organization has no impact on ROA, which is also supported by the findings of Kiranmai and Mishra (2019). The board of directors forms different types of board-level committees to address various issues more effectively.…”

“…On the other hand, Kiranmai and Mishra (2019) reported that board committees positively affected firms' net profit. The impact of CEO duality on corporate financial results has been a topic of debate for quite a while now.…”

Corporate governance in India: A systematic review and synthesis for future research

“…In another context, several studies explored corporate governance practices (e.g., Abraham et al, 2015;Al-Mudhaki & Joshi, 2004;Bose, 2009;Chatterjee, 2011;Haldar et al, 2018;Islam, 2016;Katarachia et al, 2018;Kiranmai & Mishra, 2019;Kota & Tomar, 2010;Mayur & Saravanan, 2017;Prasad et al, 2019;Sarkar et al, 2012;Srivastava et al, 2018;Subramanian, 2017;Subramanian & Reddy, 2012). Abraham et al (2015) stated that Indian companies have a high level of compliance with corporate governance disclosure requirements especially, after amendments to Clause 49 as the penalties for noncompliance increase in severity.…”

“…26 Kiranmai and Mishra (2019) There is no direct effect of CG variables on the firm performance of companies.…”