This issue of the journal covers the major aspects of corporate governance from ethical leadership to audit committee to ownership structure. In the first paper titled "Wholesome Ethical Leadership", P K Banerjea explains how it is essential for the leader of the business corporation to have an ethical perspective accommodating the interests of all the stakeholders rather than focusing on any one stakeholder. The author argues that only wholesome leadership can ensure sustainability of business and provides support from social contract theory for the argument. Such wholesome leaders become very influential and leave their legacy in the organization and on the board of directors.

In the second paper titled "CEO's Legacy to the Board: Honesty, Resilience or Trust? The Case of Xerox", the authors Rajnandan Patnaik and P K Sahoo analyze how the legacy of Joe Wilson, the founder and former Chief Executive Officer (CEO) of Xerox Corporation influenced the way the board of the company operates. Using the case study method, the authors indicate that many decisions of the board of Xerox corporation are still influenced by the values of Joe Wilson in terms of honesty, resilience and trust. The legacy is felt mainly in succession planning for higher responsible positions, particularly for the post of CEO and those chosen as CEO continue to follow Wilson's values in running the company. The authors conclude that Joe Wilson's legacy to the board as the founder CEO acted as a guiding star to rebuild the character and trust of Xerox that was painstakingly built over the last five decades.

One of the important corporate governance issues with respect to the CEO of the business corporations is the abnormally high compensation paid to them. The justification given was that such high compensation is essential to keep the motivation level high and to ensure continued wealth generation for shareholders. In the third paper titled "Motivation and Executive Compensation", the author A S Agarwal, with the support of literature, analyzes the issue indicating how money is more important than many perquisites. The author suggests that executive compensation should have only two elements: basic pay and short-term rewards in cash, and the third elementbenefits and perquisitesas far as possible, must be done away with and if it cannot be, for ego and historical reasons, it should be converted into money value and be applicable to all employees on some equitable basis, and should form an integral part of compensation. This analysis provides input to the remuneration committee of the boards of the business corporations which decides the compensation to the top management.

While remuneration committee deals with the task of fixing the compensation of the top executives, the audit committee of the board deals with financial aspects. It has the responsibility to ensure the correctness of the financial statements and effective internal controls. Audit committee has been accepted by the practitioners and researchers as one of the important pillars of corporate governance system in a business corporation. In the fourth paper titled "Corporate Governance Through Audit Committee: A Study of Indian Corporate Sector", the authors Rajeev Puri, Ruchi Trehan and Hashima Kakkar analyze the audit committee structure of Indian listed companies. The authors use a case survey method and study the audit committee of ten prominent Indian firms and their effectiveness in ensuring corporate governance practices. The authors conclude that audit committees are helping these firms under study to ensure better corporate governance practices by performing diverse functions in the areas of financial reporting, financial analysis, audit planning, reviewing of external audit and internal control.

The audit committee, the CEO compensation and other aspects of the corporate governance structure of the business corporation are influenced by many factors and most important among them is the ownership structure of the firm. The fifth paper titled "Does Ownership Structure Affect Corporate Performance? Evidence from the Market for Asset Sales", analyzes this issue. The author Michael J Bennett studies the effect of the structure of ownership on the market assessment of sale of assets. The market has an opinion about the corporate governance practices of the firm and that is expected to reflect in the stock price movement when the firm makes an announcement about asset sale. The author studies such market reaction to understand the shareholder value creation differences across various ownership patterns. The author identifies three types of ownership structures namely, large block outside, large block inside and widely held ownerships. The results of the empirical analysis suggest that firms with a 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.

The ethical and corporate governance practices of the firm lies in the values of the executives and seeds of such values are sowed when they are in business schools. Hence, the opinions of the academics in business schools are important in shaping the values of the future executives and hence, future corporate governance practices. The last paper titled "Corporate Governance Failure in India: A Study of Academicians Perception" researches this issue. The authors Gurbandini Kaur and Richa Mishra analyze how the academics in India in the field of corporate governance perceive the corporate governance systems of Indian listed firms. As a matter of fact, this is the first research of its kind in the Indian context. The authors identify important reasons for the issues affecting corporate governance in Indian firms like reasons for the failure of internal control. The conclusions provide important directions for future research in this field.

-- S Subramanian
Consulting Editor