A Brief Overview of Corporate Governance Reforms in India

Abstract

Since the late 1990s, Indian regulators as well as industry representatives and companies have undertaken significant efforts to overhaul the country’s corporate governance. These reform initiatives have been revived or accelerated following the Satyam scandal of 2009. The current corporate governance regime in India straddles both voluntary and mandatory requirements: for listed companies, the vast majority of Clause 49 requirements are mandatory; it remains to be seen whether some of the more recent voluntary corporate governance measures will become mandatory for all companies through a comprehensive revision of the Companies Act. This report briefly outlines the process undertaken to reform India’s corporate governance laws. It also provides an overview of Clause 49, the pending corporate governance-related provisions in the Companies Bill (2009), and the MCA’s Corporate Governance Voluntary Guidelines (2009).