The Importance Of Corporate Governance In The Modern Economic Scenario

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INTRODUCTION
Corporate Governance, its practices and disclosures have attained a significant amount of importance in the modern economic scenario.
Corporate Governance can be elaborated as the instruments, methodologies and relations by which enterprises are controlled and guided
In layman terms, we can say that it means the processes by which the workings of any company is determined.
Coming to the topic of disclosure, it goes without saying that with increased liberal rules and globalisation,the shareholders and stakeholders of the company, whether the public or the governing bodies, now demand transparency when it comes to the knowledge of the functioning of the company. Rules and regulations have been adopted to make the stakeholders as
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According to the case study,there are certain disclosures which can be labelled as beneficial to the company whereas there are others which might do more harm than good.
For example, Disclosure about Human Resources, risks, etc are beneficial for the organisation whereas the disclosure of marketing strategies, research and development, etc can sabotage the progress by letting vital information leak out to the competitors.
Accountability, transparency, fairness, disclosure are the four bases of the modern corporate governance. Investors’ confidence and good performances, if maintained are favourable.
European Union (EU) and Cadbury Committee, amongst many other European companies,emphasize upon the importance of corporate governance disclosure. Mr Bhasin quotes many other companies which talk about the utmost noteworthiness of corporate governance disclosure for a good reputation of the company.
The disclosures should be clear, tranparent, and have substance.

During 1990s, a number of high profile companies were involved in the corporate scandals. Some of them were:
• Leyman
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In the mid 1990s, the first CGD initiative by CII was taken, it listed all the basic governance disclosure techniques.
Mr Bhasin then moves on to the Clause 49 of the listing agreement given by SEBI. The first Clause 49 was introduced in 2000, it talked all the basic Corporate Governance practices, like the committee for audit, addressing of grievances, and the reporting made mandatory. By the late 2002, five broad themes arose on the basis of the revised and improved additions.
1. Independence of shareholders
2. Board’s role and responsibilities made clear
3. Quality and quantity of the disclosures were improved
4. The top management was made more accountable
SEBI has created a separate link called Edifar to post the information.
Gupta (2003) analysis of 30 indian companies revealed many mandatory items of the disclosure undisclosed.
Results were mixed when the results were concerned.
In 2006, Gupta received a disclosure report of Hero Honda, Maruti and Escorts, and they were followed 90%,80% and 70% respectively of the said disclosure rules.
Timeline
1996- CII introduced first initiative
1998- Desirable CG: A Code, published
1999- SEBI released the Clause 49 under Birla’s

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