Corporate Governance Practice of Indian Companies – An Assessment of OECD Principles at Global Perspective

Abstract

The corporate governance plays a major role in the integrity of businesses and markets and helps in maintaining vitality, growth and stability and leads to increase in economic efficiency. In India SEBI under its listing agreement clause 49 has laid down rules and regulations for effective corporate governance and lot of research has been carried out to evaluate the corporate governance practices of the Indian corporate. At global level Organization for Economic Cooperation and Development (OECD) has also framed principles of corporate governance which are non-binding and intended to assist member and non-member government to evaluate and improve the legal, institutional and regulatory framework of corporate governance. The principles of corporate governance as laid down by OECD can lead to examine the level of disclosure practices to corporate governance at global level of the Indian corporate. Hence, in this study an attempt has been made to examine and evaluate the level of the fulfillment towards the various principles of 30 BSE Sensex companies for the year 2010-11.The analysis reveals that the disclosure practice made by Indian company as per Clause – 49 are to a certain extent capable of meeting the various principles of OECD on Corporate Governance. The Study depicts that the principle on Role of Stakeholders in Corporate Governance has attained greater significance. The principle on Board Responsibilities and Disclosure and Transparency needs to be more emphasised by Indian companies for effective Corporate Governance practice at global level.