Impact of Corporate Governance and Financial Parameters on Profitability
of the BSE 100 Companies
--Parul Kumar, Neha Kumar, Sunil K Gupta and R K Sharma
Corporate Governance is an act or manner of governing a company. It aims at promoting fairness, transparency and accountability of an entity. This paper attempts to study the extent to which the BSE 100 listed firms are following the corporate governance guidelines that are mandatory for the firms to adopt. Also the effect of corporate governance on the profit, return on equity and return on capital employed of the company is analyzed for the year 2015. The paper also aims to study the impact of financial variables on the company’s profitability by way of stepwise regression analysis. The results of the study show that earnings per share, leverage, net worth, size of the company and share price are more or less the major factors that significantly impact the return and profit-earning capacity of any company. From the models, it is clear that with better corporate governance scores, firms can achieve greater returns on their capital invested. The results also state that 73% of the companies in the sample abide by all the regulations of the corporate governance. With the revision of corporate governance guidelines in terms of scope of independent directors, whistleblower policy, disclosure requirements and many more, other firms are also working towards achieving better scores and thus churning more profits.
© 2017 IUP. All Rights Reserved.
Independent Directors and Corporate Governance:
A Comparative Study of Indian and UK Provisions
--Kamal Kishore
Corporate governance is now perceived to be a good strategy that leads to long-term sustenance of business. Most regulations focused importantly on the role of independent directors in fostering good and responsible corporate governance. While board of directors, as central decision-making authority in companies, play a pivotal role in furtherance of corporate governance, the role of independent directors in this respect has become more critical. The effectiveness of his role hinges on, in addition to his own quality and competence, on various other factors, which may pose serious challenge for him. It has, therefore, become important to study different provisions relating to independent directors in India and compare the same with corresponding provisions from another leading jurisdiction, to assess the overall framework of independent directors on a comparative basis. This paper attempts to delineate various commonalities and differences between Indian provisions on corporate governance as contained in new Companies Act and its corresponding provision in the UK, known as UK Code of Corporate Governance.
© 2017 IUP. All Rights Reserved.
Effectiveness of Board Structure in India
and Germany: A Comparative Study
--Aratrika Choudhuri
Board structures constitute an integral component of corporate governance, for they influence corporate growth and are governed and regulated by legal and regulatory framework in order to protect shareholders’ rights and curb malpractices. This paper analyzes the multifarious attributes of board structure which influence board effectiveness, and explores the interplay of firm performance and variations in such board structures. At present, two prevalent board structures exist: a one-tier board or unitary model, as extant in India, and a two-tier board or dual model, as extant in Germany. Yet, scholars have been inconclusive about favoring one model over the other and have traditionally based their arguments on theoretical approaches. This paper aims to assess the effectiveness of the distinct board systems, based on an assessment of the contrasting experiences of these models.
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