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Corporate governance standards of Indian Inc has improved in 2017, finds a new study.
According to a joint study by IFC, a member of the World Bank Group, BSE and Institutional Investor Advisory Services India (IiAS), an advisory firm focussed on corporate governance research, the Corporate Governance Scorecard for 2017 showed that companies (of S&P CNX BSE-100) aim to increase transparency and provide confidence to investors globally.
The study suggests that more than 90 per cent of the Sensex 30 companies have provided adequate disclosures and inducted more women directors.
The 2017 Scorecard highlights several areas of improvement for Indian companies including better clarity on effectiveness of policies, improvement in board effectiveness and enforcement of shareholder rights.
The number of Sensex 30 companies giving detailed minutes of the annual general meetings, disclosures on succession planning and facilitating shareholder participation doubled in the last one year, the study revealed further.
The BSE 100 companies have improved on information standards with scores ranging between 85 and 50.
“Companies have scored over 80 per cent in each of the four scoring categories, but no one company has scored well across all categories. This shows that while there is room for improvement, a high score is achievable,” said Amit Tandon, Managing Director, IiAS, in a release. The Corporate Governance Scorecard tool, launched in December 2016, based on G20/OECD principles, aims to help companies identify areas of improvement against best practices and promote effective decision-making.
Increasing investor scrutiny and significant steps being taken by various regulatory bodies demonstrate the changing governance standards in India. “IFC works with private sector companies in emerging markets to facilitate board robustness and promote sustainable practices that can help in the growth of a company over a period of time,” the release added.
IFC has a portfolio in corporate governance of over $43 million with 23 active projects across the globe.
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