45% Indian firms positive of independent directors: Study
Clause 49 prescribes that a particular per centage of number of directors on board of a company should be independent. Follow the lead, not leader
By PTI |
NEW DELHI: Less than half of the companies surveyed in a study believe corporate governance, especially Clause 49 (of the listing agreement) dealing with appointment of independent directors, is of some benefits to their organisations.
Only 45 per cent of the companies in India feel that Clause 49, a tool for good corporate governance, has actually benefited their organisations, said a survey by Annual Corporate Governance Review by accounting and business advisory firm Grant Thornton today.
Clause 49 prescribes that a particular per centage of number of directors on board should be independent.
Thornton in its annual review on corporate governance in US, Hong Kong, China, Australia and Greece, India, said, "In India there has been a relatively positive response to the governance requirements as specified in Clause 49."
With the Indian companies increasingly going global and getting listed on foreign stock exchanges, adopting corporate governance practices is seen as an image-building exercises.
About 82 per cent of the respondents are optimistic about adopting the corporate governance methods as most of the surveyed companies here see globalisation as an opportunity for their business.
Only 45 per cent of the companies in India feel that Clause 49, a tool for good corporate governance, has actually benefited their organisations, said a survey by Annual Corporate Governance Review by accounting and business advisory firm Grant Thornton today.
Clause 49 prescribes that a particular per centage of number of directors on board should be independent.
Thornton in its annual review on corporate governance in US, Hong Kong, China, Australia and Greece, India, said, "In India there has been a relatively positive response to the governance requirements as specified in Clause 49."
With the Indian companies increasingly going global and getting listed on foreign stock exchanges, adopting corporate governance practices is seen as an image-building exercises.
About 82 per cent of the respondents are optimistic about adopting the corporate governance methods as most of the surveyed companies here see globalisation as an opportunity for their business.
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Among the companies giving a positive response about corporate governance, most of them had seen the results of such practices in the form of "improved processes, controls and awareness of risks", said the survey.
While the corporate governance rules were very welcome in India, the norms need to have more clarity about non-compliance too, according to Monish Chatrath, National Markets Leader Grant Thornton India.
Monish told media, "The governance laws could have more clarity about the penalty for non-compliance as that would help the companies understand the rules better."
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