Most research works in the field of corporate governance are done in the context of developed economies, particularly the US and the UK or in the context of big and fast developing economies like India and China. Very limited research has been done in the context of other developing economies. The first two papers in this issue focus on two such economies, namely Iran and Turkey.

The first paper, “An Empirical Study of Value Creation Criteria: Case of Iran”, by Ghodratallah Talebnia, Mahdi Salehi, Hashem Valipour and Zahra Yousefi, focuses on identifying the accounting measures which indicate the level of shareholder value creation in the context of Iran. They consider the performance measures of 92 Iranian firms which are listed in the Tehran Stock Exchange (TSE) for the financial years from 2004-2008. Based on the detailed literature survey, they develop a priori assumption that the relationship between the shareholder value creation and accounting measures are linear, and they use correlation and regression model to test the hypotheses. The results indicate that there exists a significant relationship between accounting measures, like Return on Investment (ROI) and Earnings per Share (EPS) and shareholder value creation.

Even though all the shareholders focus on value creation, the influence of different types of shareholders differs in the firm. In other words, the ownership pattern of the firm, an important corporate governance parameter has significant impact on the corporate structure of the firm. The second paper, “The Influence of Foreign Ownership on Capital Structure of Non-Financial Firms: Evidence from Istanbul Stock Exchange”, by Meltem Gurunlu and Güner Gursoy, focuses on this issue in the context of Turkey. The authors analyze the effects of foreign ownership on firm’s capital structure for the sample firms which are listed in the Istanbul Stock Exchange (ISE). The paper uses multivariate regression analysis, for pooled data set of 143

non-financial firms listed on ISE over the period from 2007 to 2008. The analysis controls the effect of other parameters like size, profitability, growth, earnings volatility, non-debt tax shield and industry type which are already proved to be influencing the leverage. The results suggest that foreign ownership is negatively related to long-term leverage. The results show that size (sales), tangibility, capital expenditure ratio, profitability and liquidity are also significant determinants of long-term leverage.

The third and the fourth papers of this issue focus on Indian corporate governance systems. The third paper, “Satyam Fiasco: Corporate Governance Failure and Lessons Therefrom”, by J P Singh, Naveen Kumar and Shigufta Uzma, analyzes the corporate governance lapses in the Satyam Computer Services. The Indian regulatory system is fairly well-developed, but has its own limitations. The corporate governance scandal in Satyam exposed the limitations of the system. The authors study the problems in the corporate governance mechanisms in Satyam and Indian regulatory systems by using a case study approach and then suggest possible remedies with the support of the literature.

The fourth paper, “Corporate Social Responsibility: A Developmental Tool for India”, by Anupam Ghosh and Chhanda Chakraborti, analyzes the importance of corporations playing a vital role in social development in the Indian context. The authors first analyze the changes in the approach for Corporate Social Responsibility (CSR) in the last few decades with the support of literature. Then they highlight the latest approach to CSR given by the United Nations Organization (UNO), which includes the concepts of Global Compact (GC) and Millennium Development Goals (MDGs). The approach indicates that the business corporations need to play a vital role, and support the initiatives of the respective governments for the development of the society. Next, the authors stress the fact that in the context of India, the efforts of the Government are not enough to develop the society and hence the corporations need to play a vital role. Finally, they analyze the efforts taken by a prominent Indian firm ‘Tata Steel’ in developing the society.

The last paper, “Whistleblowing: A Survey of Literature”, by Siddhartha Dasgupta and Ankit Kesharwani, focuses on one of the less researched topics in the field of corporate governance, i.e., whistleblowing. Given the fact that not much work has been done on this topic, the authors survey the existing literature which would help the research gap for future research. The paper first highlights the relevant literatures regarding the types of whistleblowing and the whistleblowing process. Then it analyzes organizational loyalty that differs from whistleblowing and the reasons and the motivations of the whistleblowers, by focussing on the consequences of whistle blowing. Finally, the authors study the various laws to protect the whistleblowers, mainly in the context of the US.

-- S Subramanian
Consulting Editor