Shareholders activism in corporate governance

Abstract

Corporate law in India too has undergone changes in relevant rules and regulations due to corporate frauds and failures. Corporate Governance structure under the companies Act, 2013, is standing on six pillars, which included Independent directors, Audit committee, Auditors, Internal Audit, Whistle Blower policy and secretarial Audit Report. Active participation of all stakeholders in corporate governance frame work, continuous regulatory changes and entry of domestic and overseas institutional investors have all given birth to shareholders activism in India. The present article focuses on shareholder activism in corporate governance in India Inc. SEBI LODR regulations have called for greater degree of disclosures by companies to take-well informed decisions for the shareholders in general and minority shareholders in particular. The key drivers in shareholders activism in India include Regulatory reforms, related party transactions, Annual reports and Business Responsibility Reporting, E-voting and postal ballot, responsibilities of auditors in reporting fraud, appointment of director by small shareholders, Equity research analysis and proxy advisors. The rising scenario of shareholder activism and corporate governance standards, it is needless to mention that active participation of shareholders will bring more alertness on corporate governance arena in India Inc.