Sustainability enhancement of corporate governance regime in India
| Published date | 03 April 2018 |
| Pages | 186-199 |
| DOI | https://doi.org/10.1108/WJSTSD-08-2017-0026 |
| Date | 03 April 2018 |
| Author | Ruchi Kansil,Archana Singh |
| Subject Matter | Public policy & environmental management,Environmental technology & innovation |
Sustainability enhancement
of corporate governance regime
in India
Ruchi Kansil and Archana Singh
Delhi School of Management, Delhi Technological University, Delhi, India
Abstract
Purpose –There is lack of researc h on key governance issu es (KGIs) to expedite t he sustainability of
corporate governanc e reforms in the Indian context. The p urpose of this paper is to formulate a l ist of KGIs
that would help in sustainabil ity enhancement of corporat e governance regime in India vis-à -vis other
global counterpart s.
Design/methodology/approach –First, governance issues have been identified after a thorough literature
review and after taking opinion and suggestions of experts. Second, data have been collected through the
questionnaire survey. Lastly, a model based on fuzzy set theory has been designed to identify the KGIs for
the sustainability enhancement of corporate governance regime in the Indian context.
Findings –Five KGIs have been identified in this study based on fuzzy set theory, namely, ownership
structure of the companies, code of best practices of corporate governance, regulatory framework including
monitoring institutions of the country, untrue independence of independent directors in decision-making and
judiciary system of the country.
Research limitations/implications –The KGIs identified for the Indian economy in this study can be a
useful reference for the regulators and policymakers to fill the present quality gap and devise measures to
curb noncompliance and or implementation of laws on the ground level.
Practical implications –The KGIs identified for the Indian economy in this study can be a useful reference
for the regulators and policymakers to fill the present quality gap and devise measures to curb noncompliance
and/or implementation of laws on the ground level.
Originality/value –The novelty of this study stems from the fact that very few studies have assessed the
perception of stakeholder’s about the current corporate regime in India. No study has identified KGIs.
Keywords India, Sustainability, Emerging economy, Fuzzy set theory, Corporate governance regime,
Key governance issues
Paper type Research paper
Introduction
Corporate governance problems in corporations boil down to the practice and
implementation of best of the best class codes, norms and rules. At the same time, it is
believed that mere practice and implementation of existing codes, norms and rules would
not suffice. Rather, corporations are to be run in an ethical manner that serves and protects
the interests of all its stakeholders. Freeman (1994) originated the stakeholder theory
realizing the fact that an organization is an integration of various diverse systems, each
requiring equal attention and strategic thinking. The diverse systems represent the various
interest groups, namely, shareholders, employees, creditors, lenders, customers, suppliers,
public interest groups, government agencies and bodies, etc. having a stake in the growth
and well-being of the organization (Ansoff, 1987). The organization owes a responsibility
toward all of them. Hence, it has to strive for the fulfillment of economic interests of all the
interest groups. In such a scenario, the interaction between the interest groups creates and
enhances the value of the organization which is called “the shared sense of the value.”
Henceforth, the theory of shareholder wealth maximization has been replaced by the
stakeholder theory.
In the year 2004, Freeman et al. advanced the stakeholder theory which rested on the
identification of the purpose of the firm which would drive all its actions and decisions.
In this continuum, the concept of responsibility of the firm changed and broadened.
World Journal of Science,
Technology and Sustainable
Development
Vol. 15 No. 2, 2018
pp. 186-199
© Emerald PublishingLimited
2042-5945
DOI 10.1108/WJSTSD-08-2017-0026
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/2042-5945.htm
186
WJSTSD
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