Thursday, June 26, 2008

'There is no ‘one size fits all’ approach to corporate governance'

Conflict between dominant and minority shareholders

While the term corporate governance has found a place in the annual reports and media advisories sent out by India Inc., ground realities are very different. Governance, for most companies, starts and ends with forming committees. The skeletons in the cupboard come out for all and the sundry to see during times of earnings misses, corporate developments and information-sensitive deals. So much so for CG, as it is called.
Is the board of directors doing its job, then? “The board is not really central to the corporate governance malaise in India.
The central problem in Indian corporate governance is not conflict between the interests of the management and owners as in the US and the UK, but more in terms of a conflict between the dominant shareholders vis-À-vis minority shareholders” says Mr Monish Chatrath, Leader (National Markets), Grant Thornton, New Delhi.

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