Reforms in Corporate Governance Should Penetrate into Micro Level

Abstract

Today in the era of globalization and liberalization where huge capital and resources are invested and more risk is to be taken at the same time due to demutualization the management is being separated from the ownership, in such conditions the role of Corporate Governance has vital place. The phrase “Corporate Governance” connotes a blend of rules, regulations, laws and voluntary practices that enables companies to attract finance and human capital and perform efficiently and thereby maximize long term value for stakeholders, including those of society, however in our country this term is limited up to compliance of clause 49 of the listing agreement that too by few big blue chip companies. Taking the records of big blue chip companies it is inferred that the state of Corporate Governance is effective in our corporate arena. But once we analyse the state of Corporate Governance at micro level we get a different picture of huge misgovernance. Taking the example of various Investor meet as conducted by one of the State Government of this country, in order to attract the Investment in the State, the ‘meets’ had resulted in little success only, and after analytical study it was concluded that one of the reasons for failure of Investor’s meet is poor implementation of Corporate Governance by the Companies of that State. Had we penetrated the practices of Corporate Governance into micro level we would certainly have different result of the Investor’s meet. By micro level, I mean the practice of Corporate Governance should be assessed according to the sample of Companies of a particulate District or Division wise. If it is not feasible, at-least according to region wise.

Keywords: Corporate Governance, Family Business

JEL Classification: M14