Appendix 1: List of SampleCompanies

AUTO SECTOR

Two- and Three-Wheelers1. Bajaj Auto2. Hero Honda Motors3. TVS Motor Company

Passenger Car4. Mahindra & Mahindra5. Maruti Suzuki India6. Tata Motors

Commercial Vehicles7. Ashok Leyland8. Eicher Motors9. Escorts

Auto Component10. Amtek Auto11. Bharat Forge12. Sundaram Clayton

HEAVY ENGINEERING SECTOR

13. ABB14. BHEL15. Crompton Greaves16. Kirloskar Oil Engines17. Larsen & Toubro18. Siemens19. Voltas

224

Appendix 2: Corporate GovernanceParameter Scores

Governance Parameters Point/Score Assigned

1. Statement of Company’s Philosophy on Code ofGovernance

2

2. Structure and Strength of the Board 23. Chairman and CEO Duality: 5(max)

(i) Promoter executive chairman-cum-MD/CEO 1(ii) Non-promoter executive chairman cum

MD/CEO2

(iii) Promoter non-executive chairman 3(iv) Non-promoter non-executive chairman 4(v) Non-executive independent chairman 5

4. Disclosure of Tenure and Age Limit of Directors 25. Disclosure of: 3

(i) Definition of independent director (ID) 1(ii) Definition of financial expert 1

(iii) Selection criteria of board of directorsincluding IDs

1

6. Disclosure of other Provisions as to the Boardand Committees

2

7. Disclosure of: 2(i) Remuneration policy 1

(ii) Remuneration of directors 1

8. Code of conduct: 2(i) Information on code of conduct 1

(ii) Affirmation of compliance 1

9. Board Committees:A. Audit committee (AC): 7

(i) Transparency in composition of auditcommittee

1

(ii) Compliance of minimum requirement ofthe number of independent directors inthe committee

1

(iii) Compliance of minimum requirementof the number of meetings of thecommittee

1

225

226

(Continued)

Governance Parameters Point/Score Assigned

(iv) Information about literacy andexpertise of committee members

1

(v) Information about participation ofhead of finance, statutory auditorand chief internal auditor in thecommittee meeting

1

(vi) Disclosure of audit committee charterand terms of reference

1

(vii) Publishing of AC report 1B. Remuneration/compensation committee

(RC):6

(i) Formation of the committee 1(ii) Information about number of

committee meetings1

(iii) Compliance of minimum requirementof the number of non-executivedirectors in the committee

1

(iv) Compliance of the provision ofindependent director as chairman ofthe committee

1

(v) Information about participation of allmembers in the committee meeting

1

(vi) Publishing of RC report 1C. Shareholders/investors grievance committee

(SGC):5

(i) Transparency in composition of thecommittee

1

(ii) Information about nature of complaintsand queries received and disposed itemwise

1

(iii) Information about number ofcommittee meetings

1

(iv) Information about action taken andinvestor/shareholder surveys

1

(v) Publishing of SGC report 1D. Nomination committee 1E. Health, safety, and environment committee 1F. Ethics and compliance committee 1

G. Investment committee 1H. Share transfer committee 1

10. Disclosures and Transparency: 30(a) Significant related party transactions having

potential conflicts with the interest of thecompany

2

227

(b) Non-compliance related to capital marketmatters during last three years

2

(c) Accounting treatment 2(d) Board disclosure – risk management:

(i) Information to the board on riskmanagement

2

(ii) Publishing of risk management report 2(e) Management discussion and analysis 2(f) Shareholders’ information:

(i) Appointment of newdirector/reappointment of retiringdirectors

2

(ii) Quarterly results and presentation 2(iii) Share transfers 2(iv) Directors responsibility statement 2

(g) Shareholder rights 2(h) Audit qualification 2(i) Training of board members 2(j) Evaluation of non-executive directors 2(k) Whistleblower policy 2

11. General body meetings: 3(i) Location and time of general meetings held

in last three years1

(ii) Details of special resolution passed at thelast three AGMs/EGMs

1

(iii) Details of resolutions passed last yearthrough postal ballot

1

12. Means of Communication, and GeneralShareholder Information

3

13. CEO/CFO Certification 314. Compliance of Corporate Governance and

Auditors’ Certificate:10(Max)

(i) Clean certificate from auditors 10(ii) Qualified certificate from auditors 5

15. Disclosure of Stakeholders’ Interests: 8(i) Environment, health and safety measures

(EHS)2

(ii) Human resource development initiative(HRD)

2

(iii) Corporate social responsibility (CSR) 2(iv) Industrial relations (IR) 2

Total Marks 100

Notes

1 Introduction

1. Priyabrata Patnaik (2010) ‘Power Sector Reform – A New Way of CorporateGovernance’ (A Case Study of Orissa), Ph.D. Thesis, Utkal University.

2. J. Wolfenshon, President of World Bank, in an article on corporate gover-nance, Financial Times, June 21, 1999.

3. In the proceedings of the Silver Jubilee National Convention of ICSI,Chartered Secretary, October 1997.

4. SEBI’s Kumar Mangalam Birla Committee Report, January 2000.5. Adrian Cadbury in a seminar in Mumbai, November 1996.6. Biswajit Nag, Saikat Banerjee and Rittwik Chatterjee (2007) ‘Changing

Features of the Automobile Industry in Asia: Comparison of Production,Trade and Market Structure in Selected Countries, Asia-Pacific Research andTraining Network on Trade,’ Working Paper Series, No. 37, July.

7. Status of Indian Automotive and Auto-Component Industry: Status Report,ACMA, 2008–9.

8. Pranav Mishra, Dr K. K. Garg and Dr Amit Naru (2013) ‘The Deming Prize –The Route to Improving Performance,’ International Journal of AdvancedResearch in Management and Social Sciences, Vol. 2, No. 9, 179–89.

9. Report by Ministry of External Affairs, Government of India, on Industry andSectors, November 10, 2014.

10. Corporate India, May 15, 2008.11. Facts And Figures, ‘Automotive Mission Plan 2006–2016: A Mission for

Development of Indian Automotive Industry,’ Society of Indian AutomobileManufacturers (SIAM).

12. ‘Automotive Mission Plan 2006–2016.’13. Facts and Figures, ‘Ministry of Heavy Industries and Public Enterprises,

Government of India, Department of Heavy Industry, Annual Report 2007–2008.’

14. Automotive Mission Plan 2006–2016.15. ‘ICRA Sector Analysis, Heavy Engineering,’ May 2005, www.icraindia.com.16. Engineering DAVOS 2006, India 2006, IBEF (Indian Brand Equity Founda-

tion), www.ibef.org.17. Economic Times (2009) ‘Engineering to Success,’ June 9.18. ‘ICRA Sector Analysis, Light Engineering,’ June 2005, www.icraindia.com19. Pramesh Nair and Bright Singh (2011) ‘A Study on Engineering Exports

Of Gujarat,’ AMA Centre for International Trade.20. Financial Express (2005) ‘Engineering Sector: Growing with Infrastructure,’

October 23.21. Shivi Sharma (2009) ‘A Project Report on Bharat Heavy Electronics Limited,’

Aju Joseph.22. Financial Express (2009) ‘Engineering Export Growth Down 13.7%,’ May 6.23. Indian Sector Presentation (2007) Engineering, IBEF, February 29, 2008.

228

Notes 229

24. Bindu Prashanth (2010) Mechanising Growth (Times of India Publication).25. Inderpal Kaur (1997) Impact of Liberalisation on Indian Industry (New Delhi:

Deep and Deep).26. S. C. Das (2007) ‘Corporate Governance Standards and Practices in Engineer-

ing Industry in India,’ The Management Accountant, Vol. 42, No. 8.27. CMIE stands for the Centre for Monitoring Indian Economy, whose basic

task is to collect and provide company financial data in a consolidatedmanner, as presented in the Prowess Database Package.

28. Department of Heavy Industry (DHI), Ministry of Heavy Industries andPublic Enterprises.

29. S. C. Das (2006) ‘Corporate Governance Standards and Practices in Automo-bile – 2 Wheelers Industry in India,’ The Management Accountant, Vol. 41,No. 11.

30. Economic Times (2008) ET 500, October, pp. 30–45.31. ‘Year’ in this study connotes financial year, that is, the period beginning from

1 April of a particular year to 31 March of the next year. The CMIE databaseallows the user to adopt any dates as relevant for a year, although incometax requires adoption of the financial year for all accounting purposes.

2 Conceptual Framework of Corporate Governance

1. Anil Kumar and Jyotsna Rajan Arora (2014) Governance, Ethics and SocialResponsibility of Business (Mumbai: International Book House).

2. Vibha Mahajan (2003) ‘Improving the Efficiency of Corporate Governance,’in P. P. Arya, B. B. Tandon and A. K. Vashisht (2003) Corporate Governance(New Delhi: Deep & Deep) p. 45.

3. Milton Friedman, New York Times Magazine, 13 September 1970.4. Cadbury Committee Report (1992) ‘Draft Report on the Financial Aspects of

Corporate Governance.’5. K. R. Chandratre (2000) ‘Corporate Governance and Board Agenda,’ The

Chartered Secretary, February, pp. 165–72.6. Magdi Iskander, Gerald Meyerman, Dale F. Fray and Sean Hagan (1999) ‘Cor-

porate Restructuring and Governance in East India,’ Finance and Development,March, p. 42.

7. P. L. Cochran and S. L. Wartick (1998) ‘Corporate Governance: A Review ofthe Literature,’ Financial Executives Research Foundation, Morristown, NewJersey.

8. R. A. G. Monks and Nell Minow (1995) Corporate Governance, 2nd edition(Oxford: Blackwell Publishers).

9. OECD (2004) ‘Principles of Corporate Governance,’ p. 11.10. Prabhdeep Singh Sandhu and Manjit Kaur Sandhu (2003) Growing Rele-

vance of Corporate Governance, in P. P. Arya, B. B. Tandon and A. K. Vashisht(2003) Corporate Governance (New Delhi: Deep and Deep).

11. The CalPERS Global Corporate Principles, 1996.12. Corporate Governance Forum of Japan (1997) ‘Corporate Governance Prin-

ciples: A Japanese View,’ October 30.13. A. C. Fernando (2010) Business Ethics and Corporate Governance (London:

Dorling Kindersley) 19.2, https://books.google.co.in/books?isbn=8131711730.

230 Notes

14. V. K. Pandey and Rajeev Prabhakar (2003) Corporate Governance: Its Origin,Scope and Present Scenario, in P. P. Arya, B. B. Tandon and A. K. Vashisht(2003) Corporate Governance (New Delhi: Deep & Deep), p. 24.

15. McKinsey & Company (2002) ‘Global Investor Opinion Survey on CorporateGovernance,’ http://www.mckinsey.com/governance.

16. V. K. Pandey and Rajeev Prabhakar (2003) ‘Corporate Governance,’ p. 19.17. Bikram Hundal and Seth Suresh (2003) ‘Desirable Corporate Governance in

India: A Suggestive Code,’ in P. P. Arya, B. B. Tandon and A. K. Vashisht(2003) Corporate Governance (New Delhi: Deep & Deep) p. 24.

18. H. Bosch (2002) ‘The Changing Face of Corporate Governance,’ UNSW LawJournal, Vol. 25, No. 2, pp. 270–93.

19. McKinsey & Company (2002) ‘Global Investor Opinion Survey on CorporateGovernance.’

20. Horwath Pty Ltd. (2005) ‘Horwath 2005 Corporate Governance Report,’University of Newcastle. Australia.

21. Ranjan Kumar, Vigiliance Commissioner, ‘Corporate Governance andEthics – Challenges and Imperatives,’ Circular No. 38/10/07.

22. M. C. Jensen and W. Meckling (1976) ‘Theory of the Firm: ManagerialBehaviour, Agency Cost and Ownership Structure,’ Journal of FinancialEconomics, Vol. 3, No. 4, pp. 305–60.

23. Ibid.24. N. G. Zoan, ‘Finance – Professional Essays and Assignments,’ Google

Books.25. Patrick McClogan (2001) ‘Agency Theory and Corporate Governance:

A Review of Literature from UK Perspective,’ pp. 4–6. Accessed via: www.ppge.ufrgs.br. pp.

26. J. H. Davis, F. D. Schoorman and L. Donaldson (1997) ‘Towards a StewardshipTheory of Management,’ Academy of Management Review, Vol. 22, No. 1,pp. 20–47.

27. J. H. Davis, F. D. Schoorman and L. Donaldson (1994) ‘Boards and CompanyPerformance – Research Challenges the Conventional Wisdom,’ CorporateGovernance: An International Review, Vol. 2, No. 3, pp. 151–4.

28. J. H. Davis, F. D. Schoorman and L. Donaldson (1991) ‘Stewardship The-ory or Agency Theory: CEO Governance and Shareholder Return,’ AustralianJournal of Management, Vol. 16, No. 1, pp. 49–64.

29. Thomas Clarke (2004) ‘The Stakeholders Corporation: A Business Philoso-phy for the Information Age,’ in Thomas Clarke (2004) Theories of CorporateGovernance: The Philosophical Foundation of Corporate Governance (London:Routledge) pp. 189–91.

30. A. A. Berle and G. C. Means (1934) The Modern Corporation and Private Property(New York: Macmillan). Originally published in 1932.

31. J. P. Sharma (2013) Corporate Governance, Business Ethics and CSR (New Delhi:Ane Books), p. 7.

32. EWMI/PFS Program/Lectures on Corporate Governance (2005) ‘Three Mod-els of Corporate Governance from Developed Capital Markets,’ p. 3. Accessedvia: www.pfsprogram.org.

33. Michel Aglietta and Antonie Reberioux (2005) Corporate Governance Adrift:A Critique of Shareholder Value (London: Edward Elgar) pp. 22–4.

Notes 231

34. L. Cernat (2004) ‘The Emerging European Corporate Governance Model:Anglo-Saxon, Continental, or still the century of diversity?,’ Journal ofEuropean Public Policy, Vol. 11, No. 1, pp. 147–66.

35. E. Wenger and C. Kaserer (1997) ‘The German System of Corporate Gov-ernance – A Model Which Should Not Be Imitated.’ Accessed via: www.econpapers.repec.org.

36. J. Franks and C. Mayer (2001) ‘Ownership and control of German cor-porations,’ DP 2898, Centre for Economic and Policy Research, London.Forthcoming in Review of Financial Studies.

37. T. Yasui (1999) ‘Corporate Governance in Japan,’ in Thomas Clarke, CorporateGovernance: Critical Perspectives on Business and Management, Vol. IV (London:Routledge).

38. Study by Oxford Analytica.39. R. La Porta, F. Lopez–de– Silanes, A. Shelifer and R. Vishney (1999) ‘Cor-

porate Ownership Around the World,’ Journal of Finance, Vol. 54, No. 2,pp. 471–517.

40. A. Naciri (2008) ‘The MENA countries national systems of CG,’ in A. Naciri(ed.) Corporate Governance Around the World (Oxon, N.Y.: Routledge).

41. B. Yurtoglu (2003) ‘Corporate Governance and Implications for MinorityShareholders in Turkey,’ Corporate Ownership and Control, Vol. 1, No. 1,pp. 72–86.

42. A. Shleifer and R. W. Vishney (1997) ‘A Survey of Corporate Governance,’Journal of Finance, Vol. 52, No. 2, pp. 737–83.

43. Philip Kotler and Nancy Lee (2005) Corporate Social Responsibility: Doing theMost Good for Your Company and Your Cause (Hoboken, New Jersey: JohnWiley & Sons).

44. Harvard Kennedy School at http://www.hks.harvard.edu/m-rcbg/CSRI/init_define.html (accessed September 3 2014).

45. A. B. Carroll (1991) ‘The pyramid of corporate social responsibility: towardthe moral management of organizational stakeholders,’ Business Horizons,July–August, pp. 39–48.

46. Mallen Baker, http://www.mallenbaker.net/csr/definition.php.47. Andrea Beltratti (2005) ‘The Complementarity between Corporate Gov-

ernance and Corporate Social Responsibility,’ Geneva Papers on Risk &Insurance – Issues & Practice; July 2005, Vol. 30, No. 3, p. 373.

48. J. P. Sharma (2014) ‘Governance, Ethics and Social Responsibility of Business‘(New Delhi: Ane Books) p. 232.

49. Beltratti, ‘The Complementarity between Corporate Governance and Corpo-rate Social Responsibility.’

50. Cited from http://www.ccg.uts.edu.au/corporate_governance.htm.51. A. Crane and D. Matten (2007) Business Ethics: Managing corporate citizen-

ship and sustainability in the age of globalization (Oxford: Oxford UniversityPress).

52. Manuel G. Velasquez (1998) Business Ethics: Concepts and Cases, 4th edition(Upper Saddle River, N.J: Prentice Hall).

53. A. B. Carroll and A. K. Buchholtz (2008) Business and Society: Ethicsand Stakeholder Management, 7th edition (London: South-Western CengageLearning), p. 242.

232 Notes

54. Indian Journal of Public Administration, July-September 1995, p. 638.55. Daniel Albuquerque, (2010) Business Ethics: Principles and Practices (New

Delhi: Oxford University Press).56. http://s73976.griderver.com/sites/default/files/BRT%202010%20Principles

%20Finalpdf.57. Saleem Sheikh and William Rees (1995) Corporate Governance and Corporate

Control (London: Cavendish Publishing).Economics Times (New Delhi), March 4, 2009

58. Ibid., p. 11.59. J. P. Sharma (2014) Governance, Ethics and Social Responsibility of Business (New

Delhi: Ane Books), pp. 182–92.60. Dipankar Gupta (2006) Ethics Incorporated: Top Priority and Bottom Line

(SAGE).

3 Codes and Standards of Corporate Governance

1. A. Cadbury (1992) ‘Report on the Financial Aspects of Corporate Gover-nance,’ London.

2. Study Group on Directors, Remuneration (1995) ‘Directors’ Remuneration:Report of a Study Group,’ Chaired by Sir Richard Greenbury, London.

3. ‘Hampel Final Report: Committee on Corporate Governance,’ Gee Publish-ing, London, January 1998.

4. R. Smith (2003) ‘Audit Committee Combined Code Guidance,’ pp. 3–17.Accessed via www.ecgi.org.

5. D. Higgs (2003) ‘Review of the Role and Effectiveness of Non-ExecutiveDirectors,’ pp. 3–7. Accessed via www.investmentuk.org.

6. Weil, Gotshal, and Manges (2003) ‘UK Corporate Governance Changes tothe Combined Code,’ pp. 1–4.

7. ‘Blue Ribbon Committee on Improving the Effectiveness of Corporate AuditCommittees,’ (1999), pp. 6–17. Accessed via www.nasdaq.com.

8. ‘The Sarbanes–Oxley Act 2002,’ pp. 3–56. Accessed via www.news.findlaw.com.

9. OECD (2004) ‘OECD Countries Agree NEW Corporate Governance Princi-ples.’ Retrieved 7/6/2004. Accessed via www.oecd.org

10. ‘Corporate Governance Codes and Principles in Commonwealth.’ Accessedvia www.ecseonline.com/PDF/CACG.

11. R. Bajaj (1998) ‘Confederation of Indian Industry: Desirable CorporateGovernance,’ p. 3. Accessed via www.ecgi.org.

12. SEBI (2000) ‘Report of the Kumar Mangalam Birla Committee on CorporateGovernance,’ pp. 1–20. Accessed via www.sebi.gov.in.

13. Institute of Company Secretaries of India (2006) ‘Corporate Governance(Module of Best Practice),’ 4th edition, pp. 471–92.

14. Naresh Chandra Committee (2002). Report of the committee on CorporateAudit and Governance, D. C. A., Government of India.

15. The major mandatory and non-mandatory requirements of the revisedClause 49 can be found in a circular issued by SEBI on Clause 49of the Listing Agreement, SEBI/CFD/DIL/CG/1/2004/12/10 October 29,2004.

Notes 233

4 Evaluation of Corporate Governance Compliance

1. S.C. Das (2006) ‘Corporate Governance Standards and Practices in Automo-bile – 2 Wheelers Industry in India,’ The Management Accountant, Vol. 41,No. 11.

2. The name of the company was changed from Hero Honda Motors Limitedto Hero MotoCorp Limited on 29 July 2011.

3. Calculation is based on Appendix 2.4. Calculation is based on Appendix 2.5. Calculation is based on Appendix 2.6. Calculation is based on Appendix 2.7. Calculation is based on Appendix 2.8. Calculation is based on Appendix 2.9. Calculation is based on Appendix 2.

10. Calculation is based on Appendix 2.11. Calculation is based on Appendix 2.12. Calculation is based on Appendix 2.13. Calculation is based on Appendix 2.14. Calculation is based on Appendix 2.15. Calculation is based on Appendix 2.16. Annual Report of BHEL Ltd.17. Calculation is based on Appendix 2.18. Calculation is based on Appendix 2.19. Calculation is based on Appendix 2.20. Company’s Corporate Governance Philosophy, Annual Report of L&T.21. Calculation is based on Appendix 2.22. Calculation is based on Appendix 2.23. Annual Reports of Kirloskar Oil Engines Ltd.24. Calculation is based on Appendix 2.25. Priyanka Sharma Kaushik (2013) ‘Corporate Governance – A Comparative

Study of Two Major Industries of India,’ International Journal of Governance,Vol. 3, No. 2.

26. i) Priyanka Sharma Kaushik (2013) ‘Corporate Governance In AutomobileIndustry in India,’ International Journal of Marketing, Financial Services &Management Research, Vol. 2, No. 5.

ii) Priyanka Sharma Kaushik (2013) ‘Corporate Governance In Heavy Engi-neering Industry in India,’ International Journal of Marketing, FinancialServices & Management Research, Vol. 2, No. 10.

5 Summary, Conclusions, and Suggestions

1. The Pioneer (New Delhi), May 4, 2009, p. 10.2. Economics Times (New Delhi) (2009) ‘Satyam no Wakeup Call: Governance

Given Go–By,’ 14 December, p. 16.3. Economics Times (New Delhi), June 2, 2010, p. 7.4. Economics Times (New Delhi), March 4, 2009, p. 11.5. Economics Times (New Delhi), April 15, 2010, p. 11.6. Economics Times (New Delhi), January 29, 2009, p. 17.

234 Notes

7. Times of India (New Delhi), December 22, 2009, p. 23.8. Mark S. Beasley, Joseph V. Carcello, Dana R. Harmanson, and Terry L. Neal

(2010) ‘COSO Fraudulent Financial Reporting 1998–2007 – An Analysis ofU.S. Public Companies,’ Kroll Global Fraud Report 2010.

9. Times of India (New Delhi), December 21, 2009. p. 23.10. Economics Times (New Delhi), August 24, 2010.11. Economics Times, ‘Satyam no Wakeup Call: Governance Given Go–By.’12. J. P. Sharma (2014) Governance, Ethics and Social Responsibility of Business (New

Delhi: Ane Books).13. Companies Act 2013.14. Jon Swaine (2008) ‘Richard Fuld punched in face in Lehman Brothers gym,’

Daily Telegraph, London, October 7.15. Times of India (New Delhi), March 29, 2010, p. 12.16. ‘Rating the raters, Enron and the Credit Rating Agencies,’ Hear-

ing before the Senate Committee on Governmental Affairs, 107thCongress, March 2002. Available at http://www.access.gpo.gov/congress/senate/senate12sh107.html=4.

17. Economics Times (New Delhi), December 10, 2008, front page.18. Sharma, Governance, Ethics and Social Responsibility of Business, pp. 182–92.19. http://economictimes.indiatimes.com/PostSatyam_SEBI_call_for_better_

corporate_governance/articleshow/4082856.cms.

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Index

AABB Limited, 6, 169–178, 203, 204,

206, 207, 224accountability, 18, 26, 33agency theory, 18, 19American Institute of Certified Public

Accountant (AICPA), 34American Stock Exchange, 34Amtek Auto Limited, 121–129, 203,

204, 206, 207, 224Anglo-Saxon Model, 20areas for improvement, 217–218Ashok Leyland Limited, 95–104, 203,

204, 206, 207, 224audit committee, 40, 42, 44, 46, 50,

58, 67, 74–75, 83, 91, 99, 108,116, 124, 133, 141, 148, 156, 165,173, 181, 189, 197, 209, 219, 225see also Smith Report on AuditCommittee and Blue RibbonCommittee

auditors,34, 35, 41, 219 see alsoSarbanes-Oxley (SOX) Act (US)

appointment and rotation of, 35,39, 41, 219

role of, 29auditors’ certificate, 45, 53, 62, 71, 79,

87, 95, 103, 112, 119, 129, 136,144, 153, 161, 169, 177, 185, 194,201, 227

automobile industry, 3–5, 7–8, 10,47–144, 202–208, 212,215–217, 224

domestic sales of, 5export of, 5forward and backward linkages of, 3India rank, 4

automotive mission plan, 4

Bbad governance, 16Bajaj Auto Limited, 55–63, 203, 204,

206, 207, 224

Bajaj, Rahul, 14Baker, Mallen, 23Berle, A.A., G.C. Means, 19Bharat Forge Limited, 137–144, 203,

204, 206, 207, 224Bharat Heavy Electrical Limited, 6,

153–161, 203, 204, 206, 207, 224Birla, K.M., 2Blue Ribbon Committee(US), 9, 33–34,

214, 232report on; see Improving the

Effectiveness of Corporate AuditCommittees

Bosch, H., 16, 17board of directors, 15, 18, 20, 21, 22,

29, 31, 33, 36–37structure, strength, and size of, 43,

45, 47, 55, 64, 72, 81, 89, 96,105, 113, 122, 130, 138, 145,154, 163, 170, 179, 186, 195

meetings of, 43, 45, 48, 56, 65, 73,81, 89, 97, 106, 115, 122, 131,139, 145, 154, 163, 171, 179,187, 196

business ethics, 25–27

CCadbury, Sir Adrian 2, 12 16, 24, 29Cadbury, Sir Adrian Committee (UK),

9, 29, 229report of, 29, 214

CalPERS Principles (US), 9, 14, 33,214, 229

Carroll and A. K. Buchholtz, 25Carroll, Archie, 23CEO and CFO certification, 45, 53, 61,

70, 79, 87, 94, 102, 112, 119, 129,136, 144, 152, 161, 169, 177, 185,193, 201

chairman and CEO duality, 43, 49, 56,66, 73, 82, 90, 97, 107, 115, 122,131, 140, 146, 155, 163, 171, 180,187, 196, 225

242

Index 243

Chandra, Naresh, 39, 41Chandratre, K.R., 13CII Desirable Code on Corporate

Governance, 38, 214Clause 49 of Listing Agreement, 39,

43, 214Cochran, P.L., and S. L. Wartick, 13code of best practice, 29, 30code of conduct, 44, 50, 58, 66, 74,

83, 91, 99, 107, 116, 124, 132,140, 148, 156, 164, 172, 181, 189,197, 222, 225

code of ethics, 25, 26Combined Code of Best Practices

(London Stock Exchange), 9,31, 214

Combined Code of CorporateGovernance (London StockExchange), 32

Commonwealth Association forCorporate Governance (CACG), 9,36, 232

Principles of, 36–37Companies Act (1956), 3, 40, 45,

209, 215Companies Act (2013), 24, 41companies’ grading on corporate

governance, 46, 204companies’ scores on corporate

governance, 203company philosophy on code of

governance, 43, 47, 55, 64, 71, 80,88, 96, 105, 113, 121, 130, 138,145, 153, 162, 170, 178, 186, 194,208, 215, 225

comparison of auto sector and heavyengineering sector, 9, 212

Confederation of British Industry, 29Confederation of European

Shareholders Association, 37Confederation of Indian Industries

(CII), 9, 14, 38, 41, 214, 239corporate governance, 1–2

benefits of, 17definition of, 12–14importance of, 14–16major players of, 19models of, 20–24need for, 14–16

pillars of, 18theories of, 18–20variations in compliance of, 2–3

corporate governance at global level,28–38, 213

corporate governance codes in the US,33–35

corporate governance parameterscores, 55, 63, 71 79, 88, 104, 113,121, 129, 137, 144, 153, 161, 169,178, 185, 194, 202, 225

corporate governance reports andcodes in the UK, 29–33

corporate governance voluntaryguidelines, 9, 41, 215

corporate social responsibility, 23–25,41, 45, 54, 63, 227

committee of, 24policy of, 25

Crane, A. and D. Matten, 25Crompton & Greaves Limited,

186–194, 203, 204, 206,207, 224

DDavis, J.H., 19definition of independent directors

and financial experts, 44, 49, 57,66, 74, 82, 91, 98, 107, 115, 123,132, 140, 147, 156, 164, 172, 180,188, 197

directors,remuneration of, 44, 50, 58, 66, 74,

83, 91, 99, 108, 116, 124, 133,140, 148, 156, 165, 173, 181,189, 197, 210, 218, 225

selection criteria of, 44, 49, 57, 66,74, 82, 91, 98, 107, 115, 123,132, 140, 147, 156, 164, 172,180, 188, 197

tenure and age limit of, 44, 49, 57,66, 74, 82, 90, 98, 107, 115,123, 132, 140, 147, 155, 163,172, 180, 188, 196, 218, 225

Responsibility Statement of, 54, 62,69, 78, 86, 94, 103, 111, 120,128, 136, 143, 151, 160, 168,176, 184, 192, 200, 226

244 Index

disclosure of stakeholders’ interest,45, 54, 63, 71, 79, 87, 95, 104,112, 120, 129, 137, 144, 153, 161,169, 177, 185, 194, 201, 227

Donaldson, L., 19dual board system, 21

EEicher Motors Limited, 104–113, 203,

204, 206, 207, 224Escorts Limited, 113–121, 203, 204,

206, 207, 224ethics and compliance committee, 44,

76, 167, 216Euroshareholders Corporate

Governance Guidelines,37–38

Ffairness, 17, 18, 33, 36Fama, E.F., 19family-based model, 22–23Fernando, A.C., 15Financial Report Council, 13,

29, 31firm valuation, 17

Ggeneral body meeting, 44, 53, 61, 70,

77, 86, 93, 102, 109, 119, 127,135, 144, 152, 159, 168, 176, 183,193, 200, 227

German model, 20–21good governance, 16, 17Greenbury Report (UK), 9, 29–31,

214, 232Greenbury, Sir Richard, 29, 232Gupta, Dipankar, 26–27

HHampel Report (UK), 9, 30, 31,

214, 232Harvard’s Kennedy School of

Business, 23heavy engineering industry, 6–8, 9,

144–202, 202–208, 212,215–217, 224

central statistic survey of, 6

export of, 7light engineering segment of, 6

Hero Honda Motors, 47–54, 203, 204,206, 207, 224, 233

Higgs Report, (UK), 32, 33, 214, 232Horwath Report, 17Hundal, Vikram, and Suresh Seth, 16hypotheses, 9, 43, 212, 205,

208, 217

Iimproving the effectiveness of

corporate audit committees, 34,214, 232

insider model, 20–22independent directors, 20, 30, 42, 48,

56, 64, 72, 81, 89, 97, 105, 114,123, 131, 138, 146, 154, 163, 171,179, 187, 195

investment committee, 76, 85, 149,167, 210

Iskander, Meyerman, Fray, andHagan, 13

JJ.J. Irani Committee, 9, 40, 215Japanese model, 21–22Jenson, M.C., 19justification of study, 7–8

KKiroskar Oil Engines Limited, 137,

194–202, 203, 204, 206, 207,224, 233

Kotler, Philip and Nancy Lee, 23Kumar Mangalam Birla Committee

Report, 2, 18

LLarsen & Toubro Limited 6, 178–185,

203, 204, 206, 207, 224limitations of study, 10–11, 213Lipworth, Sir Sydney, 13listed companies, 10, 206Listing Agreement, 3, 39–40, 43, 45,

206, 208, 215, 217London Stock Exchange, 9, 29, 31,

32, 214

Index 245

MMahajan, Vibha, 12Mahindra & Mahindra Limited,

80–88,203, 204, 206, 207, 224mandatory board committees, 44, 50,

58, 67, 74, 83, 91, 99, 108, 116,124, 133, 141, 148, 156, 165, 173,181, 189, 197, 208

Management Discussion and AnalysisReport, 38, 54, 62, 69, 78, 86, 94,103, 111, 120, 128, 136, 143, 151,160, 168, 176, 184, 192, 200, 226

Maruti Suzuki India Limited, 88–95,203, 204, 206, 207, 224

McKinsey survey, 15, 17means of communication, 45, 53, 61,

70, 78, 87, 94, 102, 112, 119, 128,135, 144, 152, 159, 168, 177, 184,193, 201

Meckling, W., 19Milton, Friedman, 12Ministry of Corporate Affairs, 40,

41, 221Monks, R.A.G. and Neil Minow,

13, 229Murthy, N.R. Narayan, 39

NNaresh Chandra Committee Report, 9,

39, 40, 214National Association of Corporate

Directors (NACD), 13National Association of Securities

Dealers Automated Quotations(NASDAQ), 34, 232

New York Stock Exchange (NYSE), 33nomination committee, 31, 41, 44,

76, 167, 182non-executive directors, 20, 29, 31,

48, 56, 64, 72, 81, 89, 97, 105,114, 123, 131, 138, 146, 154, 163,171, 179, 187, 195

evaluation of, 63, 70, 79, 87, 95,104, 112, 121, 129, 152, 161,169, 177, 185, 193, 201, 210,217, 218, 221, 227

role of, 32non-mandatory board committee, 44,

51, 59, 68, 76, 85, 92, 100, 108,

117, 126, 135, 142, 149, 158, 166,173, 182, 190, 198, 208, 215

non-mandatorydisclosures/requirements, 3, 40,44, 53, 61, 70, 77, 86, 93, 102,109, 119, 127, 135, 143, 152, 159,167, 175, 183, 193, 199, 210,218, 222

Oobjective of study, 8–9OECD

definition by, 9, 13, 23principles of, 35–36, 37, 214

outsider model, 20

PPandey and Prabhakar, 15Patnaik, Priyabrata, 1period of study, 10postal ballot, 45, 53, 77, 86, 93, 111,

119, 135, 152, 168, 176, 183, 227Public Company Accounting

Oversight Board (PCAOB), 34,35, 220

Public Company Accounting Reformsand Investor Protection Act, seeSarbanes-Oxley Act

Punjab, Haryana and Delhi Chamberof Commerce, 25

Rrelated party transactions, 41, 54, 62,

69, 78, 86, 94, 103, 111, 120, 128,136, 143, 151, 160, 168, 176, 184,192, 200, 226

remuneration committee, 30, 39, 42,46, 53, 60, 68, 76, 85, 92, 100,108, 117, 126, 135, 142, 149, 158,166, 173, 182, 190, 199, 210, seealso Greenbury Report

remuneration policy, 44, 50, 58, 66,74, 83, 91, 99, 108, 116, 124, 133,140, 148, 156, 165, 173, 181, 189,197, 210, 218, 225

research methodology, 9responsibility, 18, 36revised Clause 49 of the Listing

Agreement, 3, 40, 206, 217

246 Index

revised Combined Code (UK), 9,32–33, 214

Ruback, Richard, S., 19

Ssample size, 10, 208, 224Sandhu, Prabhdeep Singh, and

ManjitKaur Sandhu, 14Sarbanes-Oxley (SOX) Act (US), 9,

34–35, 214, 220Satyam fiasco, 1, 15, 16, 41, 219, 222scams and fraud, 15, 16, 219Schoorman, F.D., 19scope for future study, 223SEBI’s Kumar Mangalam Birla

Committee, 2, 9, 38–39, 214SEBI’s Narayan Murthy Committee,

39–40,secondary data, 9, 11, 213Securities and Exchange Board of

India (SEBI), 3, 38, 39, 55, 96, 214,219, 220, 221, 222, 228, 232, 234,239, 241

Securities and Exchange Commission(SEC), 33, 34

separation of ownership and control,14, 15, 18, 33

shareholders/investors grievancecommittee, 38, 44, 46, 50, 59, 67,75, 83, 92, 99, 108, 116, 125, 134,141, 148, 157, 166, 181, 189, 198,209–210

shareholder right, 36, 63, 70, 79, 87,95, 104, 112, 121, 129, 152, 161,169, 177, 185, 193, 201, 210, 217,218, 221, 227

share transfer committee, 44, 51, 77,85, 108, 119, 126, 149, 158, 199

Siemens Limited, 145–153, 203, 204,206, 207, 224

Smith Report on Audit Committee(UK), 9, 31–32, 214, 232

Smith, Adam, 14–15Smith, Sir Robert, 31stakeholder theory, 19Standard & Poor, 13statutory disclosure, 46, 54, 62, 69, 78,

86, 94, 103,111, 120, 128, 136,

143, 151, 160, 168, 176, 184,192, 200

stewardship theory, 19suggestions, 219–222Sundaram-Clayton, 130–137, 203,

204, 206, 207, 224

TTata Motors Limited, 4, 71–79, 203,

204, 206, 207, 224The Institute of Business Ethics,

London, 25The Institute of Company Secretaries

in India (ICSI), 2tools used for analysis, 10

key governance parameter, 3, 10,46, 215

Mann-Whitney U test, 10, 43,207–08,

non parametric test, 207paired difference ‘t’ test, 10, 43,

205–06percentage, 10, 43, 203rank, 10, 43, 46, 202–03point value system 10, 46,

208–209, 215transparency, 18, 26, 36, 44, 53, 60,

69, 77, 85, 93, 102, 109, 119,127,135, 142, 151, 158, 167, 175,183, 192, 199, 226

TVS Motors Company Limited, 63–71,203, 204, 206, 207, 224

Uunitary board, 20, 22

VVelasquez, G. Manuel, 25Voltas Limited, 162–169, 203, 204,

206, 207, 224

Wwhistleblower policy, 35, 39, 41, 63,

70, 79, 87, 95, 104, 112, 121, 129,152, 161, 169, 177, 185, 193, 201,210, 217, 218, 221, 227

Wolfenshon, J., 1