The Relationship Between Ownership Types and Corporate Governance and Disclosure Practices of Firms Listed on Indian Stock Exchange
Article Details
Pub. Date
:
Jan,
2016
Product Name
:
The IUP Journal of Corporate Governance
Product Type
:
Article
Product Code
:
IJCG11601
Author Name
:
Pankaj M Madhani
Availability
:
YES
Subject/Domain
:
Management
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:
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No.
of Pages
:
23
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Abstract
Corporate governance is an institutional arrangement that not only addresses the agency problem between shareholders and managers of the firm, but also provides the context for the decisions taken by the top management of the firm. In this context, the main question is whether ownership types influence corporate governance practices of firms. This research empirically studies corporate governance and disclosure practices of firms segregated according to types of ownership, i.e., foreign firms, private sector firms and public sector firms. Such firms are diverse entities with different management philosophy, responsibility and structure. This research focuses on firms across various sectors listed on Bombay Stock Exchange (BSE) and seeks to identify whether corporate governance and disclosure practices of foreign firms, private sector and public sector firms are significantly different. The research also emphasizes the salient features of firms according to ownership types. The findings shed light on the governance and disclosure practices of firms segregated according to ownership types in the legal and institutional environment of India.
Description
Corporate governance is the system by which firms are directed and controlled. The corporate
governance structure specifies the distribution of rights and responsibilities among different
stakeholders in the system, such as the board, managers, shareholders and spells out the rules
and procedures for making decisions on corporate affairs. Thus, corporate governance
provides an ethical process as well as well-defined structure through which the objectives of
the firm, the means of attaining such objectives, and systems of monitoring performance are
also set.
As such corporate governance is an institutional arrangement that not only addresses the
agency problem between shareholders and managers of the firm, but also provides the context
for the decisions taken by the top management of the firm. In this context, the fundamental
objective of a corporate governance framework is to identify a basis for strategic cooperation between shareholders and managers of the firm such that the agency problem is reduced and
a basis for decisions that promote the competitiveness of the firm is provided.