The business and trade sectors all over the world are growing tremendously in almost every domain ranging from manufacturing and production to research and development. The huge scale globalization in developed nations like USA, Australia, European nations, etc. and almost every developing country like India and China is resulting into a strong business market which demands high productivity and sustainable expansion along with operations. Hence, it is also becoming difficult to manage all the business operations in a balanced way as it results into some critical issues like delay in transportation and dealing with bulk orders. It is essential to manage the time and available resources effectively so that it does not result into some unnecessary consequences to any individual person or organisation. Therefore, corporate governance, which is a technique for effectively managing all the business activities, is required in every business sector to ensure that all the operations go in a proper way and the laws of doing business constraints or ethical values and morals are incorporated necessarily in business and corporate sector.
This particular dissertation has only one question that needs to be answered in a detailed format throughout the research detail and has been mentioned as follows
What is the significance of having corporate governance in India and how this is being affected by the policies involved in corporate governance of United Kingdom?
The corporate business in the Indian subcontinent was maintained by the British founded East India Company before 1947 when India got independence. Hence, the existing corporate governance policies in India are very much influenced by the set of policies followed by the United Kingdom for governing is corporate organisations. Therefore, the impact of UK corporate governance on the Indian corporate governance will be thoroughly analyzed in this particular research report. The Government of India after getting independence in 1947 which resulted into India becoming a sovereign nation realized the need of a strong set of policies in order to cover the corporate sector.
The prime rationale for conducting this research is to understand the policies that are adopted by the government of India to manage the functioning of its corporate organisations. There have been significant changes and upgradation in the corporate governance policies in India because of the fluctuations in political scenarios of the country. Hence, the subject of Corporate Governance in India is likely to provide a huge scope for research. Moreover, a major section of the corporate governance policies in India has been taken from that followed in UK providing a correlation between the techniques of corporate governance followed by these two countries. Another major rationale for this research is that the Indian corporate sector has experienced some major failures in the recent times which have raised some severe questions in the quality of corporate governance shown by the Indian government.
The research methodology that has been used in order to conduct this particular research is the comparative research methodology. The comparative research method is a part of the non-doctrinal research methodology that includes significance of the relationship with data collected for the study. Moreover, the direct and indirect interactions have also been mentioned in this study with different subject matters involved in it. The following study has majorly included the subject matter and information associated with general public, enforcement officers, legal professionals, and even the policy makers to accomplish this research about corporate governance. The opinions of common people have been considered along with the action taken by enforcement officers in India regarding the purpose of corporate governance. The main purpose behind choosing this methodology is that the corporate governance system in India was to be properly analysed and compared to that in United Kingdom. Moreover, the overall impact of UK corporate governance on that of India also needs to be analysed which makes the comparative research methodology as the most convenient one to be used in this research.
The non-doctrinal research is generally preferred in cases where legal provisions and the regulations issued by some high level authorities need to be considered. Moreover, this particular research consists of the interrelationships shared between the legal authorities and corporate organisations. By doing the research, the corporate governance policies and regulations that are followed in India have been considered initially and every specific detail has been analysed properly including the framework and different models of corporate governance. After completing the study about frameworks, techniques and models of governing the corporate sector of India, the primary stakeholders’ bodies that are involved in making the corporate authorities and bodies function properly have been studied. The authorities that regulate the policies of good governance in corporate sector have been studied from the Indian perspective and then the similar things in United Kingdom have been compared.
The corporate governance in India has some mixed outcomes in terms of performance and output. The recent few events that have led the corporate sector of India suffer from fraudulent activities and have alarmed the corporate governance framework of the Indian government. Moreover, the political structure of this country is very complicated compared to various other countries in the world and hence the corporate governance policies are likely to be implemented after a long time of passing the proposal for those amendments in policies. The frequent elections in India have affected the growth rate in terms of GDP and other economic conditions in India along with implementation of corporate governance framework. Following are some of the details associated with corporate governance in India and how the issues occur in it.
The term “Corporate Governance” can be described as a particular set of guidelines and principles based on which an organisation from the corporate sector is governed . The primary aim of corporate governance is to ensure that the corporate companies abide by the rules and regulations set by the government in order to deliver best performance at the national economic level without compromising any form of ethics and values . The corporate governance is also about making the corporate companies accountable to every stakeholder of the organisation in terms of general company profile and ensuring transparency in a work culture. Every detail within the organisation must be shared with the designated authorities who are the stakeholders of the organisation including shareholders, customers, employees, directors, and investors. Corporate governance can also be considered as a crucial act of managing the entities of corporate world in order to prevent any fraud or unethical work by the companies. There are two major components involved in successful corporate governance. The first component is the
There have been many features of the Indian Framework on corporate governance that are of the international recognition level. Moreover, the Indian government has made necessary amendments and has also established various authorities that look after the corporate activities of almost every domain of business in India. The Companies Act 2013 was enacted in the Indian Parliament which has provided some powers to the high level corporate departments like the board constitution and the independent directors to make certain decision in favour of the company by making proper consultation with other stakeholders that majorly include large investors. Following are the major corporate governance authorities that looked after the smooth functioning of corporate business without violating any law are compromising any ethical or moral value.
The board of directors regulates the policies to be followed within the organisation that are focused towards the increase in performance and proper expansion of the organisation. We provide the roles and responsibilities to the senior executive department including the CEO and other senior members of the company. They look after the working progress and performance of the company in terms of statistical figures and reputation among the stakeholders .
The shareholders of any corporate organisation have a crucial contribution towards the development of the company. They have the responsibility to follow every task provided to them in a specific and discipline manner so that the output of the organisation is according to the desirable criteria mentioned by the board of directors and senior executive department. Moreover, the shareholders also have to execute the operations according to the rules and regulations formulated by the company as well as the government and have to maintain the records of every activity in a proper way.
After conducting the online survey with the general population of India regarding various reforms in the Indian corporate governance sector, mixed findings have been obtained from different people. Majority of the people have provided their opinion in favour of the existing Government of India by justifying the actions of the Indian government. However, there are many people who have also criticized the Indian government for various reformations that have affected the stability of the Indian economy. The primary reformations like introducing the goods and services tax and taking some bold initiatives like “Make in India” and “Digital India” program have been widely supported by the Indian population. However, there is a huge section of the same Indian population that have criticized the government for such steps stating that it is a coercive action against the people of India by forcing them to use digital transaction methods when majority of the Indians are unable to use internet.
The quantitative data analysis about finding the effectiveness of corporate governance in India has included the results of survey which was conducted online using Facebook and YouTube where more than 6000 people have posted their result and voted for the most appropriate option according to their own respective perception. Following is the outcome of the online survey conducted where four different questions regarding corporate governance in India were asked to the Indian general people on Facebook along with their responses and post analysis.
Responding to the question about the effectiveness and intentions of the government behind demonetisation the two biggest currency notes in Indian economy, majority of the Indian general population supported the government and said that government has taken absolutely right decision by demonetising the two big currency notes. Most of the Indians believe that due to the presence of rupee 500 and 1000 notes it was easy for many corrupt people to store these notes without notifying to the government. Therefore, they were able to save a huge amount of taxes when conducting cash transactions and hiding it from the government. Out of the 18,246 people who participated in the survey, 6,457 people absolutely supported the government on this action followed by 4,284 people who believe that the step was quite good. There were around 2,943 people who are not sure whether the government has taken the right step or not followed by 2,411 people who considered it to be a bad step and 2,151 people who considered the government to have taken a disastrous step for the Indian economy. Therefore, it can be said that the Indian general population is with the government on this step because corruption and undeclared money had become a serious problem in India which was questioning the quality of corporate governance in the country.
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