Corporate governance is the system by which companies are directed and controlled. It
is influenced by firm-specific corporate governance practices and structures and also
by country-level legal and regulatory regimes. There is increased focus to determine what aspects of legal and regulatory regimes (country-level factors) and main corporate governance practices (firm-level factors) can boost the overall performance. The first two papers of this issue specifically focus on this important area of corporate governance. There is not much research on the impact of external environment on corporate governance and disclosure practices of Indian firms. The first paper, “The Impact of Legal and Regulatory Environment: A Study of Corporate Governance and Disclosure Practices of Firms Listed on Bombay Stock Exchange”, by Pankaj M Madhani, attempts to fulfill this gap in the Indian context. The main research question addressed in this study is whether the legal and regulatory environments for the corporate governance structure are complementary or substitute of each other. This research looks into the legal and regulatory environments of the US, UK, Luxembourg and India from the perspectives of corporate governance and disclosure practices by studying a sample of 54 firms across various sectors listed on the Bombay Stock Exchange of India representing the S&P BSE 500 index for the financial year 2011-12. The research empirically investigates whether corporate governance practices are significantly different for firms cross-listed in those countries. This research suggests that legal and regulatory environments for corporate governance and internal corporate governance are not substitutes; on the contrary, they are complementary because strong corporate governance at the country level reinforces the effectiveness of internal governance at the firm level, increasing the effect of internal corporate governance.
CEO duality means an executive director performing the dual roles of chairman and CEO. CEO duality is a salient topic of strategic management connecting top management and corporate boards. It exists when a firm’s chief executive also serves as the chairman of the board of directors, or else, the board is described as having an independent structure. The concept of CEO duality is very closely related to the issues related to corporate governance. There has been extensive debate in both academic and practitioner forums over the effect of CEO duality on firm performance. In this context, the second paper, “The Relationship Between CEO Duality and Firm Performance: An Analysis Using Panel Data Approach”, by Shikha Mittal Shrivastav and Anjala Kalsie, examines the relationship between the CEO duality and firm performance. The present research adds to the extant literature by employing a panel data of 145 non-financial companies listed on the National Stock Exchange of India, representing NSE CNX 200 index for a period of five years, i.e., 2008-2012. Panel data is analyzed using fixed effect within and Least Square Dummy Variable (LSDV) model, random effect model and Feasible Generalized Least Square (FGLS) model. The empirical findings conclude that when Tobin’s Q is used as performance measure, the presence of CEO duality has a negative impact on firm performance. The results reinforce the theoretical groundwork of the significance of board’s monitoring function on firm performance.
Cybernetics is concerned with the self-regulating systems of control and communications in natural (e.g., living organisms) and man-made (e.g., machines) organizations within complex and uncertain environments. A cybernetic view of corporate governance provides better understanding of the corporate governance mechanism and derives a more complete and viable definition of corporate governance. The last paper, “Corporate Governance: A Cybernetic View”, by Venugopal Kummamuru, analyzes the theoretical foundations of cybernetic and its relevance in the domain of corporate governance. This research uses the concept of cybernetics to comprehend the relationships and influences among different entities of an organization to understand the function of corporate governance. The paper takes a cybernetic view of the function and applies the concepts of the Viable Systems Model (VSM) to provide a comprehensive definition of corporate governance. In the absence of a cybernetic view, every system/subsystem of an organization would try to function in isolation and this would lead to conflict, thereby impacting the corporate governance function. Cybernetic view emphasizes what the organization needs to do for improving corporate governance practices. This paper provides a holistic analysis of corporate governance with cybernetic approach.
Automated Teller Machines (ATMs): The Changing Face of Banking in India
Bank Management
Information and communication technology has changed the way in which banks provide services to its customers. These days the customers are able to perform their routine banking transactions without even entering the bank premises. ATM is one such development in recent years, which provides remote banking services all over the world, including India. This paper analyzes the development of this self-service banking in India based on the secondary data.
The Information and Communication Technology (ICT) is playing a very important role in the progress and advancement in almost all walks of life. The deregulated environment has provided an opportunity to restructure the means and methods of delivery of services in many areas, including the banking sector. The ICT has been a focused issue in the past two decades in Indian banking. In fact, ICTs are enabling the banks to change the way in which they are functioning. Improved customer service has become very important for the very survival and growth of banking sector in the reforms era. The technological advancements, deregulations, and intense competition due to the entry of private sector and foreign banks have altered the face of banking from one of mere intermediation to one of provider of quick, efficient and customer-friendly services. With the introduction and adoption of ICT in the banking sector, the customers are fast moving away from the traditional branch banking system to the convenient and comfort of virtual banking. The most important virtual banking services are phone banking, mobile banking, Internet banking and ATM banking. These electronic channels have enhanced the delivery of banking services accurately and efficiently to the customers. The ATMs are an important part of a bank’s alternative channel to reach the customers, to showcase products and services and to create brand awareness. This is reflected in the increase in the number of ATMs all over the world. ATM is one of the most widely used remote banking services all over the world, including India. This paper analyzes the growth of ATMs of different bank groups in India.
International Scenario
If ATMs are largely available over geographically dispersed areas, the benefit from using an ATM will increase as customers will be able to access their bank accounts from any geographic location. This would imply that the value of an ATM network increases with the number of available ATM locations, and the value of a bank network to a customer will be determined in part by the final network size of the banking system. The statistical information on the growth of branches and ATM network in select countries.
Indian Scenario
The financial services industry in India has witnessed a phenomenal growth, diversification and specialization since the initiation of financial sector reforms in 1991. Greater customer orientation is the only way to retain customer loyalty and withstand competition in the liberalized world. In a market-driven strategy of development, customer preference is of paramount importance in any economy. Gone are the days when customers used to come to the doorsteps of banks. Now the banks are required to chase the customers; only those banks which are customercentric and extremely focused on the needs of their clients can succeed in their business today.
