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Article
Publication date: 17 August 2018

Shigufta Hena Uzma

This paper aims to study from three perspectives: the developed countries corporate governance (CG) practices, the role of OECD in the global convergence of CG standards…

Abstract

Purpose

This paper aims to study from three perspectives: the developed countries corporate governance (CG) practices, the role of OECD in the global convergence of CG standards and India as an emerging country.

Design/methodology/approach

The paper reviews the various CG codes and regulations enacted in the Indian paradigm with special reference to the Indian Companies Act 2013 (cited as Act 2013).

Findings

The Act 2013 endeavours to provide a governance landscape in India with reforms. The new CG codes comprehensively introduce more accountability, transparency and stringent disclosure requirements. However, these changes are affected by the ownership structure, the level of enforcement and regulatory compliance of CG disclosure practices imposed on companies.

Research limitations/implications

Further research can be carried out in three domains in emerging countries: ownership structure, the effect of legal and regulatory environment and impact of mandatory compliance.

Practical implications

Legal and regulatory environment are notable extent that can effectively govern the CG codes. An increase in the board size, investor protection and gender diversity, with strong governance structure, can enhance the transparency of companies.

Originality/value

The paper examines the prominence of CG norms with the ratification of the Indian Companies Act 2013, which is analogous with global CG policies and regulations.

Details

Qualitative Research in Financial Markets, vol. 10 no. 3
Type: Research Article
ISSN: 1755-4179

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Book part
Publication date: 14 May 2018

D. Kirk Davidson, Kanji Tanimoto, Laura Gyung Jun, Shallini Taneja, Pawan K. Taneja and Juelin Yin

The origins of corporate social responsibility (CSR) have been widely attributed to the work of scholars, and business managers as well, in North America and Western…

Abstract

The origins of corporate social responsibility (CSR) have been widely attributed to the work of scholars, and business managers as well, in North America and Western Europe. Inevitably, however, as the economic interaction of individual firms and entire nations has grown over the past several decades — call it globalization — so too has the concept and the practice of CSR spread throughout the world. It is certainly time to explore how CSR is being incorporated into the practice of business management in other regions and other countries. Therefore, in this chapter we will focus on Asia: specifically on Japan, South Korea, India, and China. It is interesting for academicians to understand how CSR is being absorbed and adapted into the business cultures of these four countries. Perhaps of even greater importance, it is vital that business managers know what to expect about the interaction between business and society as well as the government as their commercial activities grow in this burgeoning part of the world.

For each of these four countries, we will provide an overview of the extent to which CSR has become a part of the academic community and also how it is being practiced and incorporated in everyday management affairs. We will see that there are very significant differences among these countries which lead to the natural question: why? To answer this question, we will use an eight-part analytical framework developed specifically for this purpose. We will look at the history, the dominant religious beliefs, the relevant social customs, the geography, the political structures, the level of economic development, civil society institutions, and the “safety net” of each country. As a result of this analysis, we believe, academicians can learn how CSR is absorbed and spread into commercial affairs, and managers can profit from learning more about what to expect when doing business in this increasingly important region.

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Article
Publication date: 9 May 2016

Shigufta Hena Uzma

This paper aims to examine how the governance structure incorporates corporate social responsibility (CSR) into corporate behaviour in the perspective of the external…

Abstract

Purpose

This paper aims to examine how the governance structure incorporates corporate social responsibility (CSR) into corporate behaviour in the perspective of the external environment within emerging countries.

Design/methodology/approach

The paper reviews the various CSR legislations enacted in the global context and in particular reference to the Indian Companies Act 2013.

Findings

The embedded relationship between CSR and corporate governance (CG) is an outcome of extensive dimensions such as ownership structure, stakeholder approach and other external environmental factors such as the government regulations and legislation, legal enforcement and corporate disclosure culture.

Originality/value

The enactment of the Companies Act 2013 in India has infused a new direction for the corporations in implementing CSR and CG practices. This paper throws light on the coverage of the Companies Act 2013 and various challenges faced by the companies in the applicability of the CSR and CG framework in the Indian context.

Details

International Journal of Law and Management, vol. 58 no. 3
Type: Research Article
ISSN: 1754-243X

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Book part
Publication date: 14 September 2018

Roopinder Oberoi

The spotlight of this chapter is to understand the connection between public policy and corporate social responsibility (CSR); in other words – the institutionalization of…

Abstract

The spotlight of this chapter is to understand the connection between public policy and corporate social responsibility (CSR); in other words – the institutionalization of CSR. What is the role of the government for setting standards and mandating for ensuring responsibility? The emerging accepted wisdom in policy and academic circles is that many sustainability solutions are likely to result from institutional (i.e., governance) reform. A perceptive on CSR evolving as an institution of broader societal governance appears as a promising opportunity to delve into at a point in time when conventional rules, actors, and markets that steered the global economy demonstrate to be undergoing credibility crisis. CSR therefore must be considered within the wider field of institutions for governing the corporation and the economy. This chapter is exploratory as it dwells into theoretical underpinning of emerging mandatory CSR as well as provides empirical mapping of corporate responses to the new enacted legislation. The CSR analysis presented is based on a content analysis of the information contained in the annual reports of some prominent companies, government documents, audits reports, companies websites, and newspaper reports, which will provide us evidences of responses of corporates toward the CSR provisions.

Details

Stakeholders, Governance and Responsibility
Type: Book
ISBN: 978-1-78756-380-3

Keywords

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Book part
Publication date: 3 September 2018

P. N. Sankaran

Traditional artisans are the worst victims of globalisation and corporate entry into their local economy and hand-driven production processes. For their rehabilitation…

Abstract

Traditional artisans are the worst victims of globalisation and corporate entry into their local economy and hand-driven production processes. For their rehabilitation, protection, preservation and promotion of cultural heritage, embedded, inter alia, in the built environment, a suitable framework need to be crafted within the broad domain of mandatory corporate social responsibility (CSR) envisaged under The Indian Companies Act, 2013. Conceived in the above backdrop, the study attempts to situate traditional artisans as stakeholders worthy of development interventions under CSR. For want of studies and notable interventions in the above context, few small CSR cases are reviewed and a number of worthwhile areas of interventions are proposed in terms of a wish list, drawn from the socio, economic, educational, employment and cultural milieu of traditional artisans. It is found that they come under the discretionary category of stakeholders, who possess the attribute of legitimacy, but they have no power to influence the firms and no urgent claims. The study points to the necessity for establishing a National Artisans’ Rehabilitation and Development Fund, besides artisan-friendly sharpening of the schedule of CSR activities in the Indian context.

Details

Redefining Corporate Social Responsibility
Type: Book
ISBN: 978-1-78756-162-5

Keywords

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Article
Publication date: 24 June 2019

Khurram Ashfaq and Zhang Rui

The purpose of this paper is to investigate the internal control disclosure (ICDISC) practices in South Asia and compare those disclosure practices across enforced setting…

Abstract

Purpose

The purpose of this paper is to investigate the internal control disclosure (ICDISC) practices in South Asia and compare those disclosure practices across enforced setting (India) versus comply or explain setting (Pakistan and Bangladesh). Further, whether the audit firm size moderates the relationship between ICDISC practices and board & audit committee effectiveness.

Design/methodology/approach

To achieve these objectives, a sample of 100 non-financial companies was selected from Pakistan and India for three years’ period (2013-2015), whereas 93 companies were selected from Bangladesh based on market capitalization. The ICDISC index has been used which is based on the COSO framework.

Findings

Results of univariate analysis show that public sector companies in South Asia tend to disclose significantly more internal control information as compared to private sector companies. In terms of enforcement variable, the results of Mann–Whitney test show that companies listed in enforced setting have disclosed significantly greater extent of overall as well as individual categories of ICDISC as compared to companies listed in comply or explain setting. Based on multivariate analysis results for overall sample, it was found that board and audit committee characteristics and ownership by government have positive significant effect on ICDISC except representation of female or foreigner on audit committee which was found negatively significant. In addition to this, listing on foreign stock exchange and enforcement effect emerged as significant variables to influence ICDISC. Finally, the results of additional analysis state that the role of board and audit committee for influencing ICDISC has been moderated by the external auditor size in South Asia. In addition, enforcement variable is highly positively significant for companies having non-big four audit firm.

Research limitations/implications

These results imply that enforcement variable acts as an important alternative external control mechanism when companies do not have big four audit firm as their external auditors.

Originality/value

This is very first study on ICDISC in South Asia which explores the effect of enforcement and governance on ICDISC practices of firms. It also contributes toward the literature that the regulation on reporting of internal control can be effective in developing country only if there is strong penalty for non-compliance by regulatory authorities.

Details

Journal of Financial Reporting and Accounting, vol. 17 no. 2
Type: Research Article
ISSN: 1985-2517

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Article
Publication date: 4 April 2017

Ridhima Saggar and Balwinder Singh

This study aims to measure the extent of voluntary risk disclosure and examine the relationship between corporate governance firm level quality in the form of board…

Abstract

Purpose

This study aims to measure the extent of voluntary risk disclosure and examine the relationship between corporate governance firm level quality in the form of board characteristics and ownership concentration’s impact on risk disclosure in the annual reports of Indian listed companies.

Design/methodology/approach

The method adopted in this study is automated content analysis, which is applied to a sample of 100 listed Indian non-financial companies to find out the extent of risk disclosure. Further, multiple linear regressions have been applied to find out the relationship between corporate governance firm level quality in the form of board characteristics, ownership concentration and risk disclosure.

Findings

The findings reveal that the total number of positive risk keywords surpasses negative risk keywords disclosure. The corporate governance mainsprings, namely, board size and gender diversity have a positively significant effect on risk disclosure, whereas ownership concentration in the hands of the largest shareholder insignificantly affects risk disclosure, but identity of the largest shareholder having ownership concentration negatively affects disclosure of risk information in the case of Indian promoter body corporate, foreign promoter body corporate and non-institutions in comparison to family ownership.

Research limitations/implications

This study relied on a set of 39 risk keywords for measuring the extent of risk disclosure. Further, it uses a sample of 100 companies to examine the effect of corporate governance on risk disclosure at one point of time. However, a longitudinal study can help in understanding risk disclosure adopted by Indian listed companies in a better manner.

Practical implications

The findings have implications for regulatory bodies such as the Securities and Exchange Board of India, which needs to strengthen corporate governance norms with respect to board characteristics and keep a check on ownership concentration for improving risk disclosure by companies.

Originality/value

To best of the authors’ knowledge, this study is a preliminary attempt linking two research lines in India, that is, corporate risk disclosure and corporate governance quality in the form of board characteristics and ownership concentration. The study identifies corporate governance firm level qualities which lead to divulgation of risk information by the companies pointing towards strengthening of regulatory regime in the country for improved corporate governance regulations adopted by listed companies.

Details

Managerial Auditing Journal, vol. 32 no. 4/5
Type: Research Article
ISSN: 0268-6902

Keywords

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Abstract

Details

Governance-Led Corporate Performance: Theory and Practice
Type: Book
ISBN: 978-1-78973-847-6

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Book part
Publication date: 14 September 2018

Nojeem Amodu

An efficient corporate social responsibility (CSR) framework in many economies has been linked with human capital development, social and financial inclusion…

Abstract

An efficient corporate social responsibility (CSR) framework in many economies has been linked with human capital development, social and financial inclusion, environmental protection and better stakeholder management. This article examines the level of efficiency of the CSR framework in Nigeria; it underscores the developmental potentials of CSR practices within the Nigerian business community. However, a prevailing trend of haphazard and sometimes dodgy CSR practices by free riding rogue companies mars such potentials. Underpinning these dodgy practices has been a CSR ‘business case’ argument coupled with dysfunctional business (corporate) law assumptions among other causative factors. The article appraises the implications of these causative factors and towards minimising the haphazard practices, proposes corporate law reforms through which the Nigerian CSR framework may become more effective.

Details

Stakeholders, Governance and Responsibility
Type: Book
ISBN: 978-1-78756-380-3

Keywords

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Article
Publication date: 27 June 2019

Shouvik Kumar Guha, Navajyoti Samanta, Abhik Majumdar, Mandeep Singh and Ananya Bharadwaj

The past few decades have seen a gradual convergence in corporate governance norms the world over, entailing a discernible shift towards shareholder primacy models. It…

Abstract

Purpose

The past few decades have seen a gradual convergence in corporate governance norms the world over, entailing a discernible shift towards shareholder primacy models. It holds particularly true of developing countries, many of which have steadily amended corporate governance norms to enhance the scope of shareholder rights. This is usually justified through the rationale that increasing protection for foreign investors and shareholders would mean greater investment in capital market and overall financial market development. In India, the shift coincides with a series of fundamental economic and financial policy reforms initiated in the 1990s: collectively and loosely referred to as “liberalisation”, this process marks a paradigm-shift from a tightly controlled welfare economy to one considerably more laissez-faire in its orientation. A fallout of which was that the need to attract and sustain foreign investments acquired an unprecedented significance. The purpose of this paper is to help the readers understand in this larger context the corporate law reform initiatives in India, particularly those pertaining to shareholder rights and allied issues.

Design/methodology/approach

This paper empirically tests the hypothesis that enhanced shareholder protection leads to greater levels of investments, and financial developments generally. It then uses regression analysis to detect if the change in corporate governance, making it more shareholder-friendly, has had any effect on growth in financial market. It is divided into two broad parts. The first tracks the evolution of corporate governance norms in India. A robust qualitative and quantitative analysis is used to determine the tilt towards a shareholder primacy regime that Indian corporate governance regime now displays. The second chapter deals with the regression analysis where the outcome variable is financial market growth, and explanatory variable is the change in the governance regime with relevant control variables.

Findings

The authors find that change in shareholder primacy corporate governance has little effect on financial market growth in India. The authors would suggest that instead of changing the law in books, more emphasis should be given to implement those regulations and increase the overall rule of law.

Originality/value

This is the first time that such a wide-scale study has been conducted in India, using Bayesian methods. It ought to be of immense value to professionals and academics both.

Details

Corporate Governance: The International Journal of Business in Society, vol. 19 no. 5
Type: Research Article
ISSN: 1472-0701

Keywords

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