The need for good governance is not something that is typical to our country or the
economy. Even in countries where regulatory mechanisms are more demanding in their content and
more vigilant in their implementation, flagrant violations under the veil of corporate
impenetrability have generated a strident demand for better governance. Depending on the model of
corporate disclosure followed by different legal frameworks, the right to information has
forced corporates to divulge more than they ever did.
Corporate governance has been gaining momentum across the world due to
miserable corporate failures, unethical business practices, insufficient disclosure and
transparence, inefficient management board and social concerns. As always, after a slew of scandals
and corporate fraud there are cries of outrage, demand for bringing culprits to book,
suggestions over how to improve corporate governance, setting up of committees and
corporate governance dominating the political and business agenda. Scams have almost become a
regular featurethe Harshad Mehta scam, Ketan Parikh scam, UTI scam, Bhansali scam, Satyam
Scam and many more. Thanks to technology these frauds have become more visible.
The glorification of greed in corporations for personal enrichment of senior executives
has worsened inequality. The belief that corporations have to maximize only the shareholders
value is not true in today's scenario. A corporation should aim to achieve prosperity of
many, including employees, customers, suppliers and the community at large. The legal
and administrative environment in India provides excellent scope for current practices in
business. As a result, unless a management is committed to be honest and observe the principles
of prosperity, the atmosphere is too tempting to observe good corporate governance in practice.