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Wholesome Ethical Leadership
--P K Banerjea
The European model of corporate governance calls for an ethical approach towards fulfilling the
responsibility towards all stakeholders. It calls for positive and revolutionary processes to create value and true wealth
for all in a sustainable way. This is possible only with a committed leadership in the organization. The paper
is based on secondary research to understand and explain what it requires to create wholesome ethical
leadership for sustainable development.
© 2010 IUP. All Rights Reserved.
CEO's Legacy to the Board:
Honesty, Resilience or Trust?
The Case of Xerox
--Rajnandan Patnaik,
--P K Sahoo
Strong Chief Executive Officers (CEO) leave a legacy that becomes the framework of values on which
the board acts. This in turn, defines corporate governance and ethical values of the firm. The central theme
of this paper is to explain the dynamics of CEO's legacy to the board and its impact on subsequent CEOs,
the board and the company, taking an idiosyncratic case of Xerox Inc. The case of Xerox makes us realize
that the current miracle of turnaround that happened at Xerox in mid 2000s, also has some roots in the
legacy that Joe Wilson, its founder CEO, left for the board. It was Joe Wilson's legacy with which the board was
able to identify the new CEO, reinvent the company and retain the character of the company. The new CEO
Anne Mulcahy was able to further the legacy of Wilson and made a magical turnaround of Xerox through the
three values that constitute his legacy: honesty, resilience and trust. Joe Wilson's legacy was felt during the
operations of the board, as the board strove for internal succession and established systems to groom employees
to achieve higher responsible positions. The board trusted their founder CEO's intention and capabilities
and were enamored by his honesty and resilience. The people at Xerox feel that none of the CEOs carried
the legacy of Wilson, except Anne Mulcahy, who successfully brought the company back from certain
demise, Joe's leadership style.
© 2010 IUP. All Rights Reserved.
Motivation and Executive Compensation
--A S Agarwal
One of main corporate governance problems that plague the investors is the high salaries paid to the
executives. Such high salaries were justified to keep the executives motivated. This article emphasizes, based on
literature survey, that in spite of the existence of the many perquisites, money is still the single most motivating
factor for a person to work and perform in the organization. Compensation should consist of only two elements
(1) basic pay and (2) short-term rewards in cash. The perquisites which come in an intrinsic form should
be reduced; but, in practice, to satisfy the ego and prestige of the executives, one cannot reduce all the
perquisites. Under these circumstances, the perquisites should be converted into cash and paid to the executives.
One should take a short-term vision with regard to performance recognition and motivating employees, as
long-term is very uncertain. Moreover, the gap between high salary and low salary is very high in the
corporate world and also the working conditions are inhuman in most conditions. These conditions are against
corporate governance and if the corporations don't improve in time, then a time will come when shareholders
will pressurize the management to usher in changes.
© 2010 IUP. All Rights Reserved.
Corporate Governance Through Audit Committee: A Study of
the Indian Corporate Sector
--Rajeev Puri,
--Ruchi Trehan,
--Hashima
Kakkar
The present study aims at examining the effectiveness of audit committees as a tool of corporate
governance in the Indian corporate sector. It is based on analysis of 10 listed companies of India which include
Steel Authority of India Limited, Tata Chemicals Limited, Whirlpool of India Limited, Larsen & Toubro
Limited, Power Grid Limited, DLF Limited, etc. Through case survey approach, this study reveals that the concept
of audit committee is not new in India but is gaining importance day by day. The functions of audit
committee have gradually shifted from traditional areas of accounting. In the current scenario, the audit committees
set up by Indian corporate houses perform diverse functions in the areas of financial reporting, financial
analysis, audit planning, reviewing of external audit, internal control and evaluation, etc. The study also reveals
that in all the companies under study there is independent representation of the audit committees which act as
a channel of communication between external auditors and board of directors. The dynamic nature of the
role of the audit committees makes corporate governance more effectual in the context of the Indian corporate.
© 2010 IUP. All Rights Reserved.
Does Ownership Structure
Affect Corporate Performance?
Evidence from the Market for Asset Sales
--Michael J Bennett
This paper examines the effect of the structure of ownership on the market assessment of sale of assets.
Three types of ownership structures are identified in this regard such as, large block outside, inside and widely
held ownerships. The empirical results indicate that firms
with `large block outside shareholders',
experience significantly positive `announcement effects' for both selling and buying firm samples. These are
significantly greater than those for the inside shareholder and large widely held firms. This paper also examines
whether the ownership structure of the firm involved in transaction with and disclosure of the price of the
transaction has an effect on the market assessment of the deal.
© 2010 IUP. All Rights Reserved.
Corporate Governance Failure in India:
A Study of Academicians Perception
--Gurbandini Kaur,
--Richa Mishra
Corporate governance has been gaining momentum across the world due to corporate failures,
unethical business practices and insufficient disclosures. It has been observed that corporate frauds have increased
in frequency, intensity and magnitude. The prevailing inequality, glorification of greed, lack of concern
for society, feudal mindset and manifold regulations, are some reasons responsible for increase in the rate
of scams. Though a lot of new standards have been set, changes in accounting and reporting have been
made, with a focus on the process of enforcement and compliance, but the need of the hour is to build a
highly committed workforce to observe good corporate governance in practice. Thus, a major responsibility lies
on the shoulders of academicians who are considered as intellectuals in imparting the concept of
corporate governance in the minds of young professionals. The study aims to understand the perception of
academicians regarding reasons for failure of corporate governance in India.
© 2010 IUP. All Rights Reserved.
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