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The IUP Journal of Corporate Governance
Stakeholders’ Perspective on Electronic Initiatives in Corporate Governance
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The urge to reduce information asymmetry has been accelerated in the recent past to create a transparent and robust corporate governance mechanism, wherein electronic governance is a significant contributor. This study attempts to analyze the attitude of shareholders and Company Secretaries (CS) towards various aspects related to electronic governance and its impact on corporate governance. In order to understand the stakeholders’ perspectives, attitudes, and viewpoint, a questionnaire was framed and circulated amongst the shareholders and CS fraternity. t-test and ANOVA have been applied in order to test that perception about various electronic initiatives, and the impact of e-initiatives on better corporate governance is not statistically different on the basis of respondents’ demographics and participation in virtual meetings. Further, in order to determine if perception about the impact of e-initiatives on better corporate governance is dependent on respondents’ perception about various e-initiatives and demographic variables, multiple regression has been applied. Also, desirability for higher shareholder participation has been studied as the mediating variables using Sobel’s mediation test. The respondents demonstrated moderate to high agreeability for all the major variables that have been studied, implying that they are well aware about the need and positive implications of moving towards e-initiatives. Further, in regression analysis, the perception about virtual shareholder meetings, e-voting and electronic delivery of documents were found to be positively and significantly affecting the perception about impact of e-initiatives on better corporate governance. The perception about the desirability for higher shareholder participation was found to be significant partial mediator in the relationship of perception about e-initiatives (independent variable) and the perception about impact of e-initiatives on better corporate governance (dependent variable).

 
 
 

Good corporate governance is a broader view of corporate governance that focuses on relationship between a company and a broad range of other stakeholders. It is based on the satisfaction of all kinds of stakeholders, CSR and ethics (Sharma, 2011). The urge to decline information asymmetry has accelerated manifold with a view to creating more transparent and robust corporate governance mechanism. Though information and communication technology in e-governance has helped to decline the time taken to send and receive and the kind of information exponentially, still the problem persists. Electronic corporate governance implies utilizing electronic means like Internet, etc. for the purpose of corporate governance. Conducting fair and transparent shareholder meetings, board meetings, conduct of voting for the purpose of decision making, and adequate and timely information to stakeholders are essential part of corporate governance. The Ministry of Corporate Affairs (MCA) introduced ‘Green Initiatives’ with a view to reducing carbon footprints and thus making the Indian corporate world contribute towards environmental protection.

The underpinnings of the study undertaken by the best practices working group for online shareholder participation in annual meetings (2012) urge towards the diffusion of information to shareholders and stakeholders for corporation to be driven by corporate excellence. On the contrary, there were quite a few findings upholding the detriments for opting completely for electronic mode of execution to facilitate e-governance. The electronic initiatives introduced by MCA related to electronic delivery of documents, virtual shareholder meetings, virtual board meetings, and electronic voting are expected to contribute towards better corporate governance by enhancing the level of shareholder participation, giving an opportunity to board members in being a part of meetings even if they are not present at the location of the meeting, increasing the transparency and accountability, etc. However, the initiatives are not hassle-free and a lot of things need to be taken care of in order to have smooth implementation of electronic initiatives.

 
 
 

Corporate Governance Journal,Transparent and Robust corporate governance mechanism, shareholders and Company Secretaries (CS) , shareholders and CS fraternity.