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Who
Governs? Corporate
Ownership in Europe
-- Thomas Kirchmaier
and Jeremy Grant
Based
on a consistent and unique data set of firm ownership in Europe,
the authors set out to systematically catalog and categorize
the owners of European equities by type, i.e., family, institutions,
etc., and show the importance of ownership coalitions to achieve
control over the largest 100 firms in some European countries.
The authors highlight the importance of families as owners
of large European enterprises, and demonstrate the prominent
position of institutional investors as owners of those firms
across Europe, regardless of the prevailing economic model.
The authors show that more than half of all large publicly
listed companies in Continental Europe are still under the
legal control of a small group of investors.
©
2006 Thomas Kirchmaier and Jeremy Grant. All Rights Reserved.
Indian
Family-managed Companies: The Corporate Governance Conundrum
-- Satheesh
Kumar T N
The
corporate governance scenario in India has of late been widely
discussed and debated. When the ownership issues between the
two brothers of Reliance group were settled amicably, the
corporate world and even the people in power were relieved,
and the whole episode has, in fact, brought out a number of
corporate governance issues. While the regulator SEBI (Securities
Exchange Board of India) has given deadlines to corporates
regarding adherence to corporate governance norms (as depicted
by Clause 49 of the listing agreement) by December 31, 2005,
companies continue to complain about their difficulties like
not having adequate number of independent directors, etc.,
for meeting their respective deadlines; On top of this comes
the confusion that arises from the recommendations of the
Irani Committee constituted by the Department of Company Affairs,
which vary from the Clause 49. While companies in developed
countries like USA, UK, etc., have been successful in delineating
the ownership from management for quite a reasonable period,
the scenario in India has only started showing healthy signs
in this direction. It is expected that this paper, by discussing
issues like the role of Board of Directors in Indian family-managed
companies and the need to adopt `best' and `next' practices,
will help corporates to develop better practices; policymakers
to formulate pragmatic policies; and academicians to further
their research.
©
2006 IUP . All Rights Reserved.
Does
Board Size Really Matter? An
Empirical Investigation on the Indian Banking Sector
-- Manas Mayur and P Saravanan
The
relationship between board size and performance of banks in
the Indian context is assessed in this study. The paper also
analyzes the effect of other corporate governance factors
on performance. While many factors have been identified as
components of corporate governance, only three of them are
employed in this study. Furthermore, firm performance variables
are taken as the control variables. The studies have indeed
proved that firm value is also based on performing factors.
It is observed in the study that the operationalization of
the two ratiosMarket-to-Book and Tobin's Qmight trigger its
validity. The absence of the effect of board size on performance
of bank in the Indian context, as revealed in the study, is
a challenge for researchers in this area.
©
2006 IUP . All Rights Reserved.
Independent
Directors and
Expectations Gap: An Empirical Analysis
-- P Krishna Prasanna
The
inclusion of independent directors on corporate boards has
been considered to be an effective mechanism to reduce the
potential divergence between corporate management and shareholders.
There is an increasing attention on and expectation from independent
directors, by both the regulators and the investing public.
This study empirically establishes the professional belief
in board independence. The factor analysis suggests that the
independent directors bring brand credibility and better governance,
contribute to effective board functioning, and lead the governance
committees effectively. Further, the survey confirms two major
recommendations of the Irani Committee that only one-third
of the board should be independent, and nominees should not
be taken as independent directors. The paper highlights the
need for a formal process of the appointment and periodic
evaluation. Corporate governance and independent directors
are thus no longer seen as boardroom intrusions but as healthy
engines of soft power and corporate wealth.
©
2006 IUP . All Rights Reserved.
Role
of Business Schools in Developing the Culture of Corporate
Governance in Organizations
-- Muhammad
Mahmood Shah Khan and Rahmat Ullah
The
strategies employed in an organization are the personification
and characterization of its higher management. The culture
of an organization represents its values, beliefs and ethics,
which come from the shared vision of its management. Ethically
and socially responsible managements can practice good governance
or implement the code of corporate governance in organizations.
Business schools, as suppliers of business managers, can produce
well-trained and ethically responsible managers, who ensure
implementation of best practices of corporate governance in
organizations. The researchers assume that corporate governance
is not easily transferable between corporations. Teaching
corporate governance to business graduates can help develop
the culture of corporate governance in organizations in Pakistan.
The article analyzes the current situation of business school
courses in the context of corporate governance and explores
the scope of including corporate governance in the courses
of business schools in Pakistan. The researchers conducted
qualitative and quantitative surveys of business schools of
Lahore in Pakistan which explains the existing situation.
©
2006 IUP . All Rights Reserved.
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