Published Online:October 2025
Product Name:The IUP Journal of Corporate Governance
Product Type:Article
Product Code:IJCG071025
DOI:10.71329/IUPJCG/2025.24.4.131-143
Author Name:Dingari Sreenivasa Chary
Availability:YES
Subject/Domain:Management
Download Format:PDF
Pages:131-143
The study attempts to examine the rationale behind the need and importance of corporate governance in companies, with special reference to central public sector enterprises. It further examines the corporate governance guidelines applicable to central public sector enterprises (CPSE) and their implementation. The methodology is descriptive in nature and is based on secondary data sourced from different committee reports on corporate governance and reports of regulators. The study emphasizes the need for impartial decision-making for business development and protection of stakeholder interests of a company. Such unbiased decision-making devoid of vested interests, is possible only when a majority of the BOD are nonexecutive directors, especially independent directors. Independent director, as the name suggests, should not have any pecuniary relationship with the company or its holding companies, in the preceding two years or during the current financial year; other than the remuneration as the director in such companies. The independent audit and remuneration committees chaired by independent directors would foster transparency in corporate governance. Thus, several checks and balances are prescribed and revised by the competent authority periodically to minimize the adverse impact of agency problems and maximize stakeholders' satisfaction. The study observes that the CPSE are adhering to the provisions of corporate governance as stipulated in the in the Companies Act 2013, and as per the directives issued by Department of Public Enterprises.
Company is a legal person. The owner of the company in fact is the company itself. It can sue others and be sued.