Institutional EYE

Commentary on Corporate Governance Issues

Companies and investors make corporate governance a common cause

The ‘Common-sense corporate governance principles,’ signed-off by 13 CEO’s led by Jamie Dimon of JP Morgan Chase, provides practitioners a how-to guide on governance. These principles are not linked to any regulatory framework making their applicability universal. In America, the 5,000 or so public (or listed companies) account for a third of the employment and half of the capex. If the US is to continue to sit at the high table "(we) think it essential that our public companies take a long-term approach to the management and governance of their business (the sort of approach you'd take if you owned 100 per cent of a company)". Clearly the health and well-being of listed companies is importa

Grasim-ABNL Merger: That 70’s show

On 12 August 2016, the Aditya Birla Group announced the merger of its two holding companies, Aditya Birla Nuvo Limited (ABNL) and Grasim Limited. As part of the restructuring, the financial services arm, Aditya Birla Financial Services (ABFS), will also be subsequently demerged and listed separately. IiAS will engage with the stakeholders and wait for the shareholder notice of the merger before articulating a voting recommendation. In the interim, we examine the historical construct of the group structure, which will give market participants context to the transaction. Holding Structure and Control The KM Birla Group has a complex holding structure, with cross holdings between multiple group

BOARD EVALUATION IN INDIA: DISCLOSURES AND PRACTICES

The board of directors as you know, are responsible for a company’s corporate governance levels. This is also why any measure of corporate governance will focus on the efficacy of the board. For a board to be effective, accountability must be established. Board evaluation is the first step towards establishing a measure of performance and setting accountability. For the most, boards in India have had a self-imposed sense of responsibility and a largely unstructured performance feedback. Bringing in a mandatory board evaluation has ensured that there is a more comprehensive and structured manner of evaluating boards. Board evaluations must be undertaken at two levels – at individual director

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