BUSINESS
Don’t blame the business model for rating failures
Every time a rating agency fails, its issuer-pays business model is called into question. But the analytical depth and quality of ratings have little to do with the drivers of revenue: it is about the integrity of leadership and corporate culture
BUSINESS
Ending Board Permanency: SEBI increases shareholder might
In its proposed changes to the listing regulations, SEBI is trying to plug side deals and structures that entrench a set of shareholders. This will further empower shareholders and limit the ability of the controlling shareholders to play between the spirit of the regulation and the letter of the law
BUSINESS
Role of independent directors in protecting company from promoter family’s feuds
Investors expect independent directors to separate the interests of the company from those of its promoters. They now want independent directors to weigh in when there are disputes within promoter factions
POLITICS
Board permanency gives promoters leverage against investors
Giving promoters a permanent seat on the company's board can be detrimental to investor interest. When the companies' performance deteriorates, promoters hang on to their seats making it harder for investors to effect management change, and arrest value destruction
BUSINESS
NSE Scam | Is financial performance the only measure of a CEO?
The NSE board’s failure allowed the CEO to run NSE like a fiefdom, create power centres, bypass IT security, leak critical information, and allow an external influence over her decision making. Boards need to overcome the star power of a CEO and look beyond financial performance while measuring the worth of a CEO
BUSINESS
Facebook and the dangers of single-minded focus on profit maximisation
A whistleblower has alleged that Facebook Inc ignored the negative impact of its platforms and chose profits over people. While stakeholders benefit in the short-run, such decision-making may break shareholder trust and question the sustainability of businesses
BUSINESS
SEBI’s Challenge | Defining ‘control’ in Corporate India
The shift to the concept of ‘person in control’ and away from promoter is SEBI’s recognition of the market’s maturity. However, in bringing in this change, it must not compromise the measures brought in to empower non-controlling shareholders
BUSINESS
Stock Exchanges | The more the merrier?
It is hard to argue against SEBI’s intent to foster competition for stock exchanges and depositories. However, it is unclear if adding more stock exchanges will accomplish the desired outcome
BUSINESS
2021 | It’s time to expand the corporate governance agenda
2021 will challenge boards in expanding the scope of the company’s responsibilities towards better citizenship, even as investors will increase their focus on the ESG agenda and the company’s governance structure. Board accountability will be set at higher standards. And regulators will need to build capacity to improve enforcement
BUSINESS
Attending AGMs from home
Corporate India’s adoption of virtual AGMs amidst the COVID-19 lockdowns has been remarkable. Given the experience of the 2020 AGM season, regulators must consider making hybrid meetings a permanent part of the AGM process
BUSINESS
Investors must let go of some promoters
Although investors have recently voted out the CEOs of two banks, they have yet to take a stand on promoter CEOs in the corporate sector. Even so, there are instances where the long-term interests of the company will be better served by a leadership change. Investors have been shy in rocking the boat — they should not be
BUSINESS
COVID-19 | The virtual reality of shareholder meetings
With social distancing and lockdowns becoming the norm, shareholder meetings will have to take on a virtual form. Although companies, investors, and regulators may not all be prepared, this will be the new normal.
BUSINESS
Policy | Corporate India must have an unwavering commitment towards gender diversity
Despite the considerable progress, corporate India with 16 percent board representation of women in NIFTY 500 companies, remains behind the curve.
POLICY
Policy | Will 2020 mark a positive shift in India’s corporate governance?
A study showed markets mostly rewarded more stable and better governed companies.
POLICY
Policy | Independent directors need training, not eligibility criteria
The proficiency self-assessment test instituted by the MCA is unlikely to provide any meaningful solution to board strengthening. There is no denying that boards in India need training but understanding technical subjects will not help directors in taking the right decision.
INDIA
Policy | If the ‘market knows’, why doesn’t the auditor? Part 2
Does the audit industry consider its responsibility towards a company’s stakeholders while writing out scripted audit reports? There needs to be a systemic focus on improving audit quality standards.
BUSINESS
Policy | If the ‘market knows’, why doesn’t the auditor?
Does the audit industry consider its responsibility towards a company’s stakeholders while writing out scripted audit reports? There needs to be a systemic focus on improving audit quality standards.
BUSINESS
Are IndiGo’s security checks in place?
There is no denying that governance levels at Indigo could be strengthened. Even so, there is no taking away from the fact that the promoters have delivered – to run a profitable airline in the current environment is no small feat. The battle between the two sets of promoters will do more damage to shareholder returns than the issues getting raised by this discord.
BUSINESS
Hardselling India to investors: This three-point agenda should help
How do you achieve a $5 trillion economy as promised by Modi 2.0? The efficacy and quality of capital are paramount. Better corporate and regulatory behaviour, and a stronger redressal mechanism also go a long way in realising the dream.
BUSINESS
Reality Bites | Dual class shares will weaken corporate governance in India
The argument against differential voting rights is too strong to be dismissed. At a time when corporate practices are on the mend, the issuance of DVRs may just turn the clock back.
