Institutional EYE

Commentary on Corporate Governance Issues

A rough day at Tata Sons

The NCLAT judgement is a trigger for Tata Sons and Cyrus Mistry to find a new equilibrium to their relationship. The National Company Law Appellate Tribunal (NCLAT) sprung a nasty surprise on Tata Sons. In its order on Cyrus Investment Private Limited Vs Tata Sons, the NCLAT held Cyrus Mistry’s removal as Chairman Tata Sons as illegal and has set it aside: Tata Sons had removed Cyrus Mistry as its chairman on 24 October 2016. NCLAT has ordered the Tata group to reinstate him (- a relief that Mistry has not sought). A consequence of this is that, Natarajan Chandrasekaran’s appointment, as Tata Sons chairman is now illegal. Oddly the tribunal did not name Chandrasekaran but has pointed toward

Who owns the worlds listed companies?

How many listed companies are there across the world? Approximately 41,000 at the end of 2017. What is their market cap? About US$ 84 trillion, the same as global GDP that year. Where are these companies listed? 10% by number, and 36% by market cap are listed in the US. Asia accounts for the largest number 57%, and 37% of market cap. Exclude Japan, China, and other advanced Asian countries, residual Asia is home to 23% of the companies, but a paltry 5% of the global market cap. Should who own’s listed companies matter? And what are its implications? To download the full report click here. A modified version of this comment appeared in Business Standard on 13 December, under the title “Who ow

The elephant in the boardroom

India Inc needs to fight the real elephant in the boardroom: the requirement that the chairman and managing director not being related. Regulations, in doing so is forcing families to make choices that they are not quite prepared to make - chairman versus managing director and choosing between different family members. A few week ago, FICCI, an industry body, wrote to the Finance Minister, asking her to reconsider the decision to separate the role of the chairman and managing director/CEO for companies. This separation was bound to be contentious from when it was first mooted as it demanded not just separation, but that the chairman and MD/CEO not be related. What surprises is that it has t

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