Independent, Not Free: Corporate Governance in India and China

Posted: 15 May 2013

See all articles by Arindam Banik

Arindam Banik

International Management Institute

Date Written: May 1, 2013

Abstract

The aim of corporate governance as often understood is to ensure that companies that are not managed by their owners are run in the best interest of the shareholder. Based on various studies it appears that good corporate governance plays a vital role in underpinning the integrity and efficiency of financial markets. It appears that the relative ineffectiveness of independent directors is not limited to only China and India. More interestingly, there is no conclusive evidence that independence contributes to the performance of the firm. We conclude that the investors need to be aware that stricter securities laws may not be enough for firms to enhance their governance standards. This isn’t going to help their confidence unless countries improve their policies towards businesses by respecting property rights, fighting corruption, and reducing crime.

Suggested Citation

Banik, Arindam, Independent, Not Free: Corporate Governance in India and China (May 1, 2013). Available at SSRN: https://ssrn.com/abstract=2264797

Arindam Banik (Contact Author)

International Management Institute ( email )

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