Jul'19
Focus
Corporate governance has gained significance, drawing public interest in the wake of growing power of institutional stakeholders. There are several supporting studies and studies that have contradicting perspectives. There are many issues ranging from the role of board of directors to executive compensation.
In the first paper, "Corporate Governance and Risk Management: An Analysis of Indian Banking Sector", the authors K R Swain and Anup Kumar Samantray, have attempted to explore the relationship between corporate governance and risk management in the context of the banking industry. To achieve this, authors approached six banks in order to examine their risk management practices and corporate governance. The authors have taken up the study to emphasize on the need for financial institutions to focus on risk control and management systems in the wake of financial losses banks have witnessed in recent times. The responses were gathered from the board of directors and senior management team on how banks were responding to the risks. Based on the analysis of the data, the authors found a positive relationship between the proposed variables. The study concludes that the board of directors are directly not responsible for risk management, but governance activities holds more weight while managing the risk.
The second paper, "The Relationship Between Gender Diversity on Bank Boards and Bank Performance: A Review", by Udayan Karnatak, focuses on the available literature on women representation at the top executive level with reference to the banking industry. The representation of women on the board has seen a notable increase from 14% in 2014 to 20% in 2018 world over, according to the survey by Grand Thornton. India is slightly above than the global average in women representation at the executive level. But it is observed that major representation is seen at lower levels of management. This is further backed by literature that shows that gender does not have any influence on the earnings of the institutions. Studies supporting women's representation in various organizations are reviewed, with the focus on the banking industry in the Indian context. The author concludes that gender diversity should be ensured and women's presence can make a cognizable impact at the top management level.
The third paper, "Executive Compensation: The Critique and the Ideal", authored by Purna Prabhakar Nandamuri and Radha Mohan Chebolu, analyzes the possible issues associated with executive compensation. The authors have raised the concern over the comprehensive pay packages and the huge gap between top senior management and employees backed by statistical figures. Discrepancies associated with pay packages are highlighted with secondary data sourced from various reports. The authors have proposed approaches which can be considered while fixing the pay packages of senior managers. The authors have also discussed the pros and cons of Arms length model and Agency problem. The authors conclude that executive packages should be based on certain moral, fairness-based populist approaches.
The fourth paper, "Board Structure and Composition in Manufacturing, Telecom and IT and ITeS Industries in India", authored by Mohammed Abdul Nayeem, Siddharth Kushwaha and Bharath Supra, examines the board structure and its composition in companies from Manufacturing, Telecom, IT and ITeS sectors listed on Bombay Stock Exchange (BSE) Index. The data employed is secondary, sourced from Prowess and CMIE data bases. The authors have employed descriptive statistics and correlation analysis (Industry wise) to explain the board structure and composition. They have also noted the female director's presence and participation associated with the companies chosen. Inferences are drawn from the results and recommendations are made.
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Article | Price (₹) | ||
Corporate Governance and Risk Management: An Analysis of Indian Banking Sector |
100
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The Relationship Between Gender Diversity on Bank Boards and Bank Performance: A Review |
100
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Executive Compensation: The Critique and the Ideal |
100
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Board Structure and Composition in Manufacturing, Telecom and IT and ITeS Industries in India |
100
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Corporate Governance and Risk Management: An Analysis of Indian Banking Sector
In the present corporate world, corporate governance is viewed as an important, essential and most significant factor for the smooth functioning of firms. This study explores the relationship between corporate governance and risk management in the banking sector and measures banks performance based on the theoretical background relevant to the corporate governance of the banks. The literature in this paper looks at three areas of governance: ownership structure, board structure, and risk management. The impact the governance mechanism has on both performance and risk depends upon the governance policies and performance effects. The paper also highlights the areas where further research is needed in the future.
The Relationship Between Gender Diversity on Bank Boards and Bank Performance: A Review
Women have been underrepresented in business for very long. Women's presence in the business at different levels, including top management position, is reasonably less as compared to men. The qualities women possess make them special for any business looking for sustainable existence. For decades, it has been researched and found that women show different skills and fortitude when it comes to handling stress at the senior management level. Through the literature review, it is found that women enjoy certain advantages over men in handling the sensitive business of a bank. These qualities are hard work, risk averseness, diligence, ethical, conservative, good communicator, a team player, nurture people around and coordinated. Gap in the existing literature related to growing stress at banks (non-performing assets) and how women's presence in the top management will give performance advantage to the Indian banks in terms of profitability are highlighted.
Executive Compensation: The Critique and the Ideal
Consequent to the subtle and dynamic business environment and recent corporate failures, the focus shifts towards the emerging challenges for the social, moral and ethical objectives of corporate governance around the world. Executive compensation has emerged as the most contentious issue during the current decade. The exorbitant compensation packages of the senior managers and the resultant extensive gap between the remunerations of the senior managers and the employees and staff at the middle and lower levels has been the focal point for bitter comments from various sections of the society. Corporate boards seem to think that large pay packages stem from fierce competition for talented managers capable of leading global organizations through the turbulent environment. But critics argue that executives get rich at the expense of shareholders and other workers. However, the reality is that the average ratio of CEO pay to average worker pay was 335 times in 2015 compared to 40 times in the 1980s, making a mockery of the ethical ideals, such as Plato's, that no person should be worth more than five times of another. In this background, the present paper attempts to analyze the issue of executive compensation in the light of the ethical ideals.
Board Structure and Composition in Manufacturing, Telecom and IT and ITeS Industries in India
Corporate governance came into being to check the unlawful business practices in the corporate world and safeguard the interests of the shareholders. Lack of corporate governance will have an effect on businesses. Anglo-American model is being followed by the developing nations, particularly by India, for corporate governance. However, the overall corporate governance structure is still at a rudimentary level. The present study examines the relationship between board structure and ownership structure and its composition across different companies listed on Bombay Stock Exchange (BSE) Index in three industries, namely, Manufacturing, Telecom, IT and ITeS. The reason for picking up these industries for the study is that together these three industries contribute more than a quarter of the GDP of India. So it becomes inevitable to study the relationship between board structure and ownership structure in these industries. A two-stage methodology is used?First stage: Analysis of Descriptive statistics, i.e., mean and standard deviation (Liu and Fong, 2010); and Second Stage: Correlation analysis among variables. The results inferred from the work highlight the relationship between board and ownership structure of these three industries.