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.

In India, nearly one third of the publicly listed companies are promoted, controlled and managed by the family. But many of these big companies of India are out of the family's control because of their large size and a good percentage of them have succeeded in clearly separating management from ownership. To reduce any conflicts of interest the owners of the companies take a back seat when it comes to management, enjoying only the fruits of ownership. However, the situation in India leaves much to be desired. The promoters are actively involved in the day-to-day management and run the enterprises as their private property even when their holding is low in comparison with outside holdings. In the listing agreement between the company and the stock exchange, where the company's shares are listed, SEBI mandated a clause of regulatory framework in India on corporate governance. While countries like US, based on its bad experiences in the recent past has chosen to take an extreme step to enact a law for making companies to conduct in a better way on corporate governance, India decided to adopt a middle-of-the-road path in the form of a clause in the listing agreement between the company and the stock exchange.