Corporate governance became crucial for success from "summary" of A Business History of India by Tirthankar Roy
During the period of economic liberalization in India, corporate governance emerged as a critical factor in determining the success of businesses. This was a significant shift from previous times when business success was largely dependent on factors such as access to resources and government connections. The changing economic landscape in India brought about by liberalization meant that companies now had to operate in a more competitive environment where good governance became essential for long-term sustainability and growth. Corporate governance refers to the system of rules, practices, and processes by which a company is directed and controlled. It encompasses the relationships between a company's management, its board of directors, its shareholders, and other stakeholders. By establishing a framework for accountability, transparency, and ethical conduct, corporate governance helps in building trust among investors and stakeholders, which is crucial for attracting investment and maintaining a positive reputation in the market. The need for effective corporate governance became even more pronounced as Indian companies began to expand globally and compete with multinational corporations. Foreign investors and partners, in particular, expected Indian companies to adhere to international standards of governance to ensure transparency and minimize risks. Companies that failed to meet these expectations faced challenges in raising capital, forming strategic alliances, and attracting top talent. Furthermore, the increasing prominence of institutional investors in India's capital markets further underscored the importance of corporate governance. Institutional investors, such as mutual funds and pension funds, play a significant role in influencing corporate behavior and driving improvements in governance practices. Companies that adopted robust governance mechanisms were more likely to attract institutional investors, thereby enhancing their credibility and access to capital.- The evolution of corporate governance in India reflects a broader trend towards greater transparency, accountability, and ethical behavior in the business world. Companies that prioritize good governance practices are better positioned to navigate the complexities of the modern business environment and achieve sustainable success in the long run.
Similar Posts
Investors use financial instruments to diversify their portfolios
Investors often seek to diversify their portfolios as a way to manage risk. This involves spreading their investments across di...
Corruption and greed
The British East India Company was a corporation with a singular focus: profit. Its primary concern was not the welfare of the ...
Crisis management strategies in the Tata group
The Tata group is known for its strong crisis management strategies which have helped it navigate through various challenges ov...
The time value of money matters
The time value of money is a fundamental concept in finance that is essential for understanding the impact of time on the value...
Pay attention to insider buying and selling
When it comes to finding winning stocks, one useful strategy is to look at insider buying and selling. Insiders are people who ...
Performance attribution identifies sources of portfolio returns
Performance attribution is a crucial tool used by institutional investors to analyze the components that contribute to the over...
Buy when the market is down
The intelligent investor will recognize that market fluctuations are a normal part of investing. Instead of being swayed by emo...
Reviewing past exam questions can help candidates prepare effectively
One powerful strategy for candidates to enhance their preparation for the exam is to review past exam questions. By examining q...
Risktaking became inherent in business ventures
The evolution of business in India has been marked by a notable shift towards embracing risk as an integral part of entrepreneu...