Sectoral Shades of Corporate Governance: A Comparative Study of Indian Listed Companies

Pratibha Sharma¹ , Asha Sharma²

1. Seth RL Saharia Government PG College, Kaladera, Jaipur, Rajasthan, India.
2. Dept. of Accountancy and Business Statistics, University College of Commerce & Management Studies, Mohanlal Sukhadia University, Udaipur, Rajasthan, India.

Section:Research Paper, Product Type: Journal-Paper
Vol.10 , Issue.11 , pp.36-41, Nov-2024

Online published on Nov 30, 2024

Copyright © Pratibha Sharma, Asha Sharma . This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
 

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Abstract :
High-profile corporate scams around the world have shaken investors` confidence and faith; therefore, in order to restore stakeholder trust and raise global funds, a need for corporate governance was realized. As an economy`s strength is largely dependent on the welfare of citizens and the success of the corporate world, many rules and regulations have taken place to make each company strictly adhere to corporate governance disclosure practices. In the Indian corporate world, three key sectors, i.e., the foundation of an economy, FMCG, pharmaceuticals, and IT, are chosen to analyse the extent of compliance with CG practices. The top three companies in each sector, based on market capitalisation, are chosen to represent that sector. For the study purpose, corporate governance disclosure practices are measured by an index, i.e., CGDI, which is constructed using 30 corporate governance parameters grouped into seven sub-indices such as board characteristics, audit committee, risk and management committee, corporate social responsibility committee, nomination and remuneration committee, stakeholders’ relationship committee, and ownership structure, to measure level of compliance. The research, conducted over nine years from 2015-16 to 2023-24, uses secondary data collected from CMIE Prowess, annual reports, and journals. The results revealed that the CGDI of all three sectors is above 80%, indicating good governance practices, but the pharmaceutical sector outperforms FMCG and IT in corporate governance disclosure practices, indicating the need for sector-specific policies to improve transparency. The result of this study may provide practical insight for academicians, researchers, corporations, and policymakers.

Key-Words / Index Term :
corporate governance, disclosure, CGDI, FMCG, IT, pharmaceuticals

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