Corporate governance refers to the systems and policies that influence a corporation's administration. Effective corporate governance emphasizes efficiency, accountability, and adaptability to the changing climate. In India, governmental regulations, past economic influences, and individual and group corporate policies influence the tone and direction of corporate governance.

History

Until 1947, India was subject to the British Empire as a colony and its economy was structured to suit the reigning power. The adoption of the British legal system established effective precedence for corporate governance law but little framework in actual implementation. Post-Independence reform and socialistic policies have influenced the development of Indian corporate governance.

Current

India's current corporate climate is defined largely by its developing status as an emerging economic power. Foreign investors are a powerful minority and currently influence both private and public corporate governance. Concentrated share ownership and group company fund schemes also characterize contemporary corporate governance.

Future

Recent economic failures in developed countries have prompted Indian officials to recalibrate the direction of corporate governance, focusing on the need for increased regulation, centralization, and accountability. Corporate governance within the banking system is working toward a more market-based approach, while the private sector is focusing on corporate governance models that best equip India to become a fully developed economy.