Topics: Corporate governance, Stock market, Board of directors Pages: 29 (6408 words) Published: April 17, 2014
Duration: November 19-December 10, 2012


Atul Gupta
Assistant Professor
Hindu College, University Of Delhi, Delhi

Submitted in Partial Fulfillment

University of Delhi

“Legal Framework of Corporate Governance in India”

Atul Gupta
Assistant Professor
Hindu College, University Of Delhi, Delhi
Email ID:

All Correspondence to:

Atul Gupta
Assistant Professor
Hindu College,
University Of Delhi,
Email ID:
Mobile: +91-9871853120

Keywords: Company Act, SEBI, Corporate Governance, Stakeholders, Investors JEL classification: G1, G3, G32, G38, G39, K22

I take this opportunity to express my profound gratitude and deep regards to course coordinator Prof. K. V. Bhanu Murty for his exemplary guidance, monitoring and constant encouragement throughout the course of this Report. The blessing, help and guidance given by him time to time shall carry me a long way in the journey of life on which I am about to embark. I also take this opportunity to express a deep sense of gratitude to Dr. Ajay Kr. Singh and Dr. Vanita Tripathi for their cordial support, valuable information and guidance, which helped me in completing this task through various stages. I am obliged to Dr. Vijaya Laxmi Singh, Deputy Director of CPDHE and staff members of CPDHE, for the valuable information provided by them in their respective fields. I am grateful for their cooperation during the period of my assignment. Lastly, I thank almighty, my parents, brother, sisters and friends for their constant encouragement without which this assignment would not be possible.

Atul Gupta

Table of Contents Page No. A) AcknowledgementIII
B) Executive SummaryV
C) Chapter-1
1.1 Introduction to concept of Corporate Governance1
1.2 Need for legal framework2
1.3 Evolution of Corporate Governance in India 3
D) Chapter-2
Literature Review7
E) Chapter-3
Research Methodology9
F) Chapter-4
Legal framework of Corporate Governance in India10
G) Chapter-5
5.1 Issues and Challenges in Corporate Governance 16 5.2 Outlook and Recommendations20
H) Chapter-6
Executive Summary

In some ways Corporate Governance is not a new concept; responsibility in the handling of money and conduct of business and commerce has always been important. In the last century or so, with the increasing complexity and power of corporations, it has come to the fore emphatically. A decisive beginning was made in this direction when after the introduction of liberal-market reforms, the Indian Corporate Sector, led by CII, drew up a voluntary code of Corporate Governance (CG). Further developments from this point vacillated between making CG voluntary or mandatory. Studies have found reasonably good levels of adherence to the mandatory CG rules in India. But, there is still a long way to go; the Indian model is based on the Anglo-Saxon example, which may not be wholly suited to the peculiar Indian conditions. Evolution of Corporate Governance in India

The concept of CG gained prominence in India post liberalization, voluntarily introduced by CII, the leading industry association in India. By the year 2000, the same had been incorporated as a necessity in the clause 49 of the listing agreement administered by the market regulator SEBI. It was followed by the Naresh Chandra Committee report with major stress on independent oversight of board and audit, and improvements in disclosures...

References: Gupta, Arindam and Parua, Anupam(2006), An Enquiry into Compliance of Corporate Governance Codes By the Private Sector Indian Companies . Tenth Indian Institute of Capital Markets Conference Paper. Available at
Khanna, Tarun and Krishna G
Varma, Jayanth Rama, (1997), “Corporate Governance in India: Disciplining the Dominant
Shareholder”, IIMB Management Review, December 1997, 9(4), 5-18
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