Indian Corporate Research Articles

Proficiency of independent directors: an Indian corporate governance perspective

Purpose Independent directors (IDs) in India are required to qualify for the online proficiency self-assessment test to acquire or retain their position on the corporate boards. The purpose of this paper was to examine the perceived positive and negative aspects of the new mandate for the overall quality of corporate boards in India. Design/methodology/approach This study used a qualitative methodology and applied the interpretative phenomenological analysis approach. Data was collected from board members using semi-structured interviews. Findings This study revealed the positive and negative perceived aspects of the mandatory policy prescription of proficiency test for IDs. It was found that the participants emphasized training and mentoring programs for the IDs. Practical implications Drawing upon the actual board experiences of the participants, this study has the potential to assist policymakers in making regulations that are more effective in enhancing the quality of corporate boards. The example of action taken as well as the criticism or positive aspects pointed out can generate interest in other legislators. Originality/value The concept of proficiency test for IDs is unique to India. A review of literature did not reveal the existence of any regulatory provisions for a mandatory uniform test for examining the proficiency of IDs, in any corporate law jurisdiction apart from India.

An empirical study of usage of interest rate swaps among Indian mid-cap corporates

PurposeInterest rate derivatives (IRDs) are the essential components of financial risk management and are used across various industry sectors. The objective is to analyze the differences in approach to managing interest rate risks between the Indian corporates that execute IRDs and the ones that do not.Design/methodology/approachInterest rate fluctuations require Indian corporates to hedge their exposures in foreign currency interest rates. This is all the more true for mid-sized corporates because of their balance sheet exposures. Additionally, they may not have the resources to formulate risk management policies. This paper analyzes data collected from financial statements of a diverse set of companies that use IRD and helps in formulating such a strategy.FindingsThe results indicate significant differences for some of the parameters like information asymmetry and agency cost between users and non-users of IRDs. The study further suggests causality between users of derivatives and parameters like size, growth and debt.Research limitations/implicationsThe study compares users and non-users of IRDs, thereby identifying factors unique to users of IRDs. It also studies causality relations which explain the motivation to do IRDs. Thus, it enables risk managers to use this as a reference point to decide on their strategies.Originality/valueWhile there are multiple studies across geographies and sectors including commercial banks in India on the usage of interest rate swaps, this study focuses on Indian mid-tier corporates. Furthermore, the study distinguishes between users and non-users based on financial parameters, which in turn would provide a framework for decision-hedging strategies.

Exploring the Influence of Sustainability Reporting on Indian Corporate Financial Performance: A Meta-Analytical Synthesis

This research paper delves into the burgeoning field of sustainability reporting and its influence on the financial performance of Indian corporations, a topic of increasing significance in the evolving global business landscape. The primary objective of this study is to examine the extent to which sustainability reporting correlates with the financial performance of Indian companies, and to understand the nature and strength of this relationship. A meta-analytical approach was adopted to synthesize findings from diverse studies, providing a comprehensive overview of existing literature on the subject. This methodology involved rigorous inclusion and exclusion criteria, a systematic search across major academic databases, and the application of statistical techniques to calculate effect sizes and assess heterogeneity. The key findings indicate a positive, albeit modest, correlation between sustainability reporting and financial performance, as evidenced by an overall effect size (r) of 0.11. This outcome points to the importance of integrating sustainability practices into business strategies, not just as a compliance or ethical imperative but as a potential contributor to financial success. The study’s findings vary across different industries, with the banking sector showing a more significant relationship compared to non-financial firms. The implications of this research are multifaceted, influencing corporate strategy, policy formulation, and investment decisions. It underscores the strategic value of sustainability reporting in the Indian corporate sector and highlights its role in shaping a business approach that harmonizes economic prosperity with environmental and social responsibility. This study contributes to the broader understanding of the interplay between sustainability and financial performance, offering valuable insights for businesses, policymakers, and stakeholders in the rapidly evolving Indian corporate landscape.

IFRS convergence and accounting quality: A comparative analysis of global and Indian corporate

IFRS convergence and accounting quality: A comparative analysis of global and Indian corporate

A study on the role of leadership in sustainable business practices in India

In the context of global environmental challenges and the increasing importance of sustainable development, the role of leadership in steering organizations towards sustainable business practices has become crucial, particularly in emerging economies like India. This theoretical research paper explores the impact of leadership styles and behaviors on the adoption and implementation of sustainable business practices within Indian organizations. Drawing upon a variety of leadership theories, including transformational, ethical, and servant leadership, the paper proposes a conceptual framework that links specific leadership attributes to sustainability outcomes in the Indian business context. The paper begins by examining the unique socio-economic and cultural landscape of India, which shapes the business environment and the sustainability challenges it faces. It then reviews the literature on leadership theories and their relevance to sustainability, adapting these concepts to the Indian context. The core of the paper hypothesizes that Indian leaders who exhibit transformational and ethical behaviors are more likely to foster a culture of sustainability within their organizations. This is due to their ability to articulate a clear vision of sustainability, inspire and motivate employees towards this vision, and incorporate ethical considerations into decision-making processes. Furthermore, the paper discusses the role of Indian philosophical and spiritual principles, such as the concept of Dharma (duty/righteousness) and Karma (action), in influencing leadership approaches towards sustainability. It argues that these indigenous concepts can enrich leadership practices and enhance the commitment to sustainability by aligning business operations with broader societal and environmental goals. To support its arguments, the paper synthesizes evidence from theoretical models, case studies of Indian companies that have successfully integrated sustainability into their business strategies, and interviews with business leaders known for their sustainability initiatives. Finally, the paper outlines practical implications for leadership development and policy recommendations to encourage sustainable business practices across the Indian corporate sector. By bridging the gap between leadership theory and sustainable business practices in the Indian context, this research contributes to a deeper understanding of how effective leadership can drive the transition towards more sustainable and responsible business models in emerging economies.

Logit model for predicting financial distress in Indian corporate sector

Logit model for predicting financial distress in Indian corporate sector

Users' perception towards e-governance adoption benefits: evidence from the Indian corporate sector

Users' perception towards e-governance adoption benefits: evidence from the Indian corporate sector

Propensity Score Matching and a Difference in Difference Approach to Assess ESG’s Influence on Indian Acquirer Performance

This research involves an in-depth analysis of the intricate relationship between Environmental, Social, and Governance scores and the financial and operational performance of Indian acquirers. The research methodology employed herein entails a meticulously crafted design, incorporating a blend of the Propensity Score Matching and Difference-in-Differences model. This strategic amalgamation serves to rigorously assess the impact of ESG factors on the performance outcomes of Indian acquirers involved in M&As. The empirical findings of this study reveal a robust and statistically significant correlation between M&A endeavours and ESG considerations. Notably, the research discerns that M&A activities tend to exert an adverse influence on ESG performance metrics within the Indian corporate landscape. This nuanced insight underscores the multifaceted interplay between strategic corporate actions and the broader sustainability and governance landscape, thereby offering valuable implications for scholars and practitioners in finance and corporate strategy.

Human resource disclosure practices: a comparative analysis of public and private sector manufacturing companies of Indian corporate sector

Human resource disclosure practices: a comparative analysis of public and private sector manufacturing companies of Indian corporate sector

GRI-aligned disclosures of Indian corporates: a study on environmentally sensitive industries

GRI-aligned disclosures of Indian corporates: a study on environmentally sensitive industries

Users’ perception towards e-governance adoption benefits: evidence from Indian corporate sector

Users’ perception towards e-governance adoption benefits: evidence from Indian corporate sector

Impact of board characteristics and capital structure on firm value: evidence from the Indian corporate sector

Impact of board characteristics and capital structure on firm value: evidence from the Indian corporate sector

Human resource disclosure practices: a comparative analysis of public and private sector manufacturing companies of Indian corporate sector

Human resource disclosure practices: a comparative analysis of public and private sector manufacturing companies of Indian corporate sector

Are Bankruptcy Prediction Models Effective for Predicting Ratings? An Empirical Investigation of Altman’s Model in Indian Corporate Sector

The alternative method for predicting credit ratings by employing bankruptcy prediction models is the main subject of the present article. Rating agencies utilize an extremely intricate rating methodology, which differs from agency to agency, and the ratings given by agencies are less reliable in anticipating short-term defaults and react slowly to credit events, as demonstrated by the failure of agencies during the crisis of 2008. Both credit rating assignment and bankruptcy prediction focused on the probability of default, but the methodology used by the two varies significantly: corporate bankruptcy prediction models predict the future default probability of a company as a whole, whereas credit rating only access the default risk associated with a specific instrument. Therefore, it is preferable to employ bankruptcy prediction algorithms to access a company’s future ratings. The present study used Altman’s framework in order to assess whether bankruptcy prediction models can be applied to access a company’s future ratings in advance or not and found that it can be used as an alternative method to predict the future credit ratings, which can be used by investors and banks to make better investment and lending decisions.

Navigating Privileged Communications: Balancing Justice and Confidentiality in Indian Corporate and Legal Practices

In India, corporate and legal practices operate under strict confidentiality rules that govern the sharing of information between clients and their legal representatives. These rules, commonly known as "privileged communications," are essential in ensuring the protection of both the client's interests and the ethical obligations of legal professionals. However, navigating these rules can be challenging and requires a delicate balance between the principles of justice and confidentiality. this article will explore the concept of privileged communications in Indian corporate and legal practices, their importance, and how they can be navigated effectively. Examination of some of the challenges associated with privileged communications and how they can be overcome to ensure that the interests of both clients and legal professionals are protected will also be dealt with.

Prioritizing the Precursors of Patients’ Experience in Indian Corporate Hospitals: Application of hybrid RIDIT-GRA approach

Objective: This study aims to identify, understand, and prioritize the influence of distinct patient experience (PX) antecedents that have substantial evidence in shaping the patients’ preferences and experiences in Indian corporate hospitals. The study is expected to assist healthcare managers in the personalization and alignment of clinical services with consumer expectations and demands. Design/ Methodology: A cross-sectional study was conducted across eight corporate hospitals to collect 220 patient data samples. A recent measurement model, titled ‘Patient Experience Questionnaire’, was adopted to harness pre-validated PX factors and related items. Further, two independent prioritization techniques, Relative to an Identified distribution (RIDIT) analysis and Grey Relational Analysis (GRA), were executed to render item precedence of the precursors of PX. Results: Through RIDIT, items belonging to factors 'doctor services' and 'nursing services' secured favorable performance ratings, whereas items under 'information' and 'next-of-kin' obtained comparatively less favorable responses. There was evidence of minimal deviations when the results were verified through GRA, but the ranks obtained in both the independent techniques (RIDIT & GRA) revealed a robust correlation of 99.5%. Moreover, the applicability of two independent prioritization techniques enhances the rigor and reliability of findings. Conclusions: Although the respondents were mostly satisfied with their care providers, an effective provider-patient communication was not evident in the care system. Patients seemed to be overly dependent on their physicians and showed limited intention to participate in a collaborative process. Lack of patient-centric culture, deficit infrastructure, excessive workload on healthcare providers, and restricted translation of patient-centric concepts into practice deterred organizations from fully benefiting from patients' involvement in clinical facets.

How does risk aversion shape investors’ intentions? Evidence from the Indian corporate bond market

Risk aversion plays a crucial role in understanding how individuals make financial decisions and allocate their resources. This study analyzes the influence of risk aversion on behavioral intentions and explores the mediating role of attitudes, subjective norms, and perceived behavioral control. Additionally, it investigates the moderating effect of gender and financial literacy on behavioral intentions of investors. A sample of 400 people was collected from Indian retail investors by administering a structured questionnaire through stock brokering firms, and data were analyzed using Partial least squares – Structural equation modelling in the Smart PLS 3.3.9 software. The research found that risk aversion, attitude, subjective norms, and perceived behavioral control significantly impact an investor’s intention. Among all the antecedents of behavioral intentions, perceived behavioral control (β 0.481*) was found as a significant predictor of the intention compared to attitude (β 0.154*), subjective norms (β 0.224*) and risk aversion (β 0.082*) factors. Further, mediation analysis found that attitude, subjective norms, and perceived behavioral control partially mediated the relationship between risk aversion and intention. Lastly, the multi-group analysis revealed that gender and financial literacy did not moderate the association between risk aversion and intention.

IFRS and ESG Disclosure in Indian Corporate Sector

World-wide, there is movement toward embracing environmental, social, and governance (ESG) issues in corporate conduct and performance. These developments have led to movement toward “reimagining capitalism,” and many firms have ridden the wave of investor enthusiasm for firms that prioritize ESG disclosures. The present study examines the role of International Financial Reporting Standards (IFRS) in India on ESG and overall ESG reporting. The Indian capital markets regulator, SEBI, had made integrated reporting compulsory for listed firms to disclose information about matters that substantively affect the organization’s ability to create value over the short, medium, and long term at a time. Motivated by this episode, we examine how accounting regulations in the form of IFRS could influence ESG disclosures in India. Based on the ESG scores of 104 non-financial firms in India from 2013 to 2021, the study finds a positive relationship between ESG reporting and IFRS introduction in India. The performance of firms (return on assets) and leverage had a negative impact on ESG disclosures. JEL Codes: G14, K22, L51, M38, M41

Social diversity in corporate boards and firm outcomes

We examine how firm performance is associated with social diversity among corporate directors, proxied by diversity along religion and caste, a deep-rooted institution dividing India’s Hindu society into hundreds of communities. To identify directors’ social identities, we build one of the first data-driven mappings of last names to caste and religion. We find that Indian corporate boards are strikingly homogeneous (i.e. lack diversity) during 1999–2015. Using four instrumental variable strategies, we find that board homogeneity is negatively related to firm performance. We find that the negative impact of board homogeneity is due to overlapping views and networks of caste-proximate directors and cronyism impairing their monitoring and advising roles.

ESG in India: It is Time to Take Notice

ESG is essential in corporate social responsibility (CSR) and corporate governance. This paper aims to study the ESG material factors the top 10 Indian companies adopt to increase their ESG scores, and this research paper discusses previous research's limitations, implications, and perspectives for the future of India. In addition, the form tries to study corporate manageability, ways of behaving, and drivers mentioned in the company's ESG materiality factors disclosures. This research paper focuses on India's top 10 ESG-rating listed companies in NIFTY 50 based on their ESG disclosure year to the latest FY (2013-2021) score in India. It reveals some interesting examples and advancements. The evaluation of chosen organizations' manageability drives showed that key natural maintainability objectives, for example, lessening ozone-harming substance discharges, further developing energy proficiency, obtaining environmentally friendly power energy, proficient water use, squandering the board, and waste reusing, overwhelm their aspirations and that they don't give equivalent need to the social part of ESG ventures. Through a systematic literature review and critical analysis of India’s Top 10 ESG-scoring companies in Nifty 50 disclosure policies, this paper shows the advancement of ESG in India and a critical examination of the theoretical rules and regulations by SEBI basis of Indian corporate sector step toward research in ESG, the link between the extension of ESG in India, Economic consequences after implementation of ESG and affect of ESG disclosure policies adopted by top 10 corporates in India. This paper extends to show the progress and failings of ESG research and focuses on the future of ESG in India to give an allusion to the academic study and practice of ESG incorporates. Keywords: Business Industry, BRSR, Disclosure Policies, ESG, Government Acts