Corporate Governance in the Indian Context
Summary
The paper “Corporate Governance in the Indian Context” basically discusses the corporate governance in India and a comparison with the United States. The paper explains that since India has become a part of BRIIC, the economy of the country has grown positive. It is also an important aspect and feature to understand that the Indian approach towards accounting, auditing and corporate governance that may differ to the United States model. The paper explains the practice of economic deregulation since 1991. Another important feature which makes the two cultures differ is the fact that Indian companies are mostly family owned where the decision are taken by the family members. Under the US system, this is not the case and the company cannot hurt the rights of minority shareholders.
At the time when India turned out into an independent state, the country adopted to stay as a socialist economy, which was finally changed in 1991 where the country embarked a major policy change. In United States, corporations have developed a friendly system where the decision regarding any policy is actually made by the court. When discussing the law of India, there is no such history for the country and the accounting standards are still not completely followed in this part of the world. However, in the United States SEC has handed over the accounting standard within its private sector, which has not been a practice in the Indian economy and its companies. It is the duty of government and its officials to regulate the judicial authorities across the country and follow an effective as well as efficient working of the capital market.
Along with this, in India the business reorganization and bankruptcy processes are quite weak and time consuming that gives the shareholders an added advantage over its creditors. This phenomenon has again introduced a new mechanism for the market based discipline, which is called the activist bondholders that is currently not available in the Indian economy. Along with this, it is again important to understand that the ICAI has not allowed or permitted international audit firms to practice in India using the traditional brand names, this is the ............................
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