Deciphering the Diverse Nature of Corporate Governance in the Indian Public Sector: A Study of Public Sector Bharat Heavy Electricals Limited (BHEL) Company

Abstract

The study of Bharat Heavy Electricals Limited (BHEL)11BHEL was founded in 1950s. It has emerged as the largest engineering and manufacturing enterprise of its kind in India. Power equipment major BHEL has approached the government for the grant of coveted Maharatna status, which will give the company greater financial autonomy. At present, BHEL is a Navratna company. A company qualifying for the Maharatna status should have an average annual turnover of more than Rs 20,000 crores in the last three years, according to the new guidelines. Once a company gets the Maharatna status, its board would not be required to take the government’s permission for investments up to Rs 5,000 crores in a joint venture project or wholly owned subsidiary. For the Navratna companies, the limit is Rs 1,000 crores. was undertaken to understand the quality of corporate governance in public sector and to gain insight into the major infirmities in internal and external conditions that impinge on the quality of corporate governance in the public enterprises. In India, to bring in more transparency and accountability in the functioning of Central Public Sector Enterprises (CPSEs), the government of India in June 2007 introduced the Guidelines on Corporate Governance. These Guidelines were originally of voluntary nature. The government has acknowledged the need for continuing the adoption of good Corporate Governance Guidelines for ensuring robust public sector with high level of transparency and decided to make these Guidelines mandatory and applicable to all CPSEs. Thereby, government in March 2010 asked all the 246 CPSEs to mandatorily follow corporate governance norms and business ethics, a step to ensure more transparency in their functioning.

Citation

Oberoi, R. (2013), "Deciphering the Diverse Nature of Corporate Governance in the Indian Public Sector: A Study of Public Sector Bharat Heavy Electricals Limited (BHEL) Company", Crowther, D. and Aras, G. (Ed.) The Governance of Risk (Developments in Corporate Governance and Responsibility, Vol. 5), Emerald Group Publishing Limited, Leeds, pp. 203-233. https://doi.org/10.1108/S2043-0523(2013)0000005013