Need & Significance of Corporate Governance
1)Â Â Â Â Â Â Â Â Â Â Changing ownership Structure:
The profile of corporate ownership has changed significantly. Public financial institutions are the single largest shareholder is the most of the large corporations in the private sector. Institutional inventors and mutual funds have now become singly or jointly direct challenges to management of companies.
2) Social Responsibility:
A company is a legal entity without physical existence. Therefore, it is managed by board of directors which is accountable and responsible to share holders who provide the funds. Directors are also required to act in the interests of customers, lenders, suppliers and the local community for enhancing shareholders value.
3) Scams
                  In recent years several corporate frauds have shaken the public confidence. A large number of companies have been transferred to Z group by the Bombay stock exchange.
         4) Corporate Oligarchy:
                  Shareholder activism and share holder democracy continue to remain myths in India. Postal ballot system is still absent. Proxies are not allowed to speak at the meetings. Shareholders’ association, inventor’s education and awareness have not emerged as a countervailing force.
5) Globalization
As Indian companies went to overseas markets for capital, corporate governance become a buzz world.
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