B.Com Corporate Governance

Corporate Governance is a comprehensive, syllabus-based textbook that treats corporate governance as an integrated discipline—combining theory, law, practice, ethics, and case studies across Indian and global contexts. This Edition has been thoroughly revised to incorporate:

• Recent amendments to the Companies Act 2013
• Updates to SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015
• Post-Kotak Committee reforms and evolving expectations around Board effectiveness, disclosure, and stewardship

The authors position corporate governance as a defining pillar of sustainable business, ethical leadership, and stakeholder trust, rather than as a peripheral compliance topic.

This book is intended for the following audience:

• B.Com. (Hons.) and B.Com. Students – Aligns exactly with DSC-6.2: Corporate Governance under the NEP-based Undergraduate Curriculum Framework 2022
• Faculty Members & Academic Institutions – Designed as a plug-and-teach text for a semester-long paper with integrated teaching devices—unit-wise structuring, clear sequencing, and assessment aids
• Corporate Professionals & Compliance Officers – Ideal for company secretaries, compliance officers, board members, analysts, auditors, and legal professionals who need clarity on board processes, regulatory requirements, and governance risks
• Researchers, Policymakers & CSR/ESG Professionals – Rich in comparative frameworks, theoretical models, and case studies, offering robust material for policy evaluation, governance analytics, and academic inquiry

The Present Publication is the 2nd Edition, authored by Prof. (Dr) Aruna Jha and Anuj Bhatia, with the following noteworthy features:

• [Learning Objectives & Outcomes] Each chapter starts with bullet-point learning objectives (e.g., understanding origins of corporate governance, appreciating its necessity, exploring governance–management relationship)
• [Integrated Theory–Law–Practice Approach] The text consistently moves from concept → theory → models → law → practice → case study → exam application (Test Your Knowledge and Practical Exercises)
• [Case-embedded Treatment]
• Global Failures – BCCI, Maxwell, Enron, WorldCom, Vivendi, Lehman Brothers
• Indian Failures – Satyam, Kingfisher Airlines, PNB Heist, IL&FS Group Crisis, ICICI Bank scandal, Yes Bank crisis, and a synthesis of "common governance problems
• [Board-centric Governance Focus] A whole chapter on Board and Board Committees – The Epicentre of Governance, covering legal provisions for directors, independent directors, board powers, and mandatory committees (Audit, NRC, Stakeholders Relationship, CSR)
• [Regulatory Deep-dive] A dedicated chapter on Corporate Governance Reforms in India consolidating: Birla Committee, Naresh Chandra Committee, Narayana Murthy Committee, SEBI's Clause 49, Companies Act 2013, SEBI LODR 2015, Kotak Committee 2017, and post-2018 LODR amendments
• [Ancient Indian Thought & Ethics] Integration of Kautilya's Arthashastra, Gandhian Trusteeship, Rajarshi model of leadership, Mandala theory, and Yogakshema-based CSR—anchoring modern governance in Indian civilisational ideas
• [Assessment Support] University question papers (B.Com. (Hons.) and B.Com., May 2025, Sem VI) are included, mapped to chapters and units, with marks distribution and options

The coverage of the book is as follows:

• Introduction to Corporate Governance
• Explores the historical evolution from Berle & Means (1932) and Bob Tricker (1984) to contemporary scandals that triggered regulatory reforms. Introduces:
• Narrow and broader definitions (Cadbury, OECD 2023, ICSI)
• Need/benefits (value creation, stakeholder protection, global capital, ESG, sustainable growth)
• Four Pillars – Accountability, fairness, transparency, independence—illustrated via a simple diagrammatic table
• Governance vs management, with a structured comparison table and a figure showing shareholders–Board–management hierarchy
• Theoretical Framework of Corporate Governance
• A complete theory chapter covering:
• Agency/Shareholder Theory – Principal–agent conflict, information asymmetry, agency costs, monitoring mechanisms, ownership patterns
• Stewardship Theory – Trust-based, intrinsic motivation, CEO–Chairman unity, reduced monitoring costs
• Stakeholder Theory – Primary vs secondary stakeholders, shared value creation, CSR linkages (Nestlé example), board diversification for stakeholder representation.
• Resource Dependency Theory – Board as a resource-linking mechanism; interlocking directorships; external networks
• Managerial Hegemony Theory – Dominance of management, symbolic boards, passive shareholders, ideology of managerialism (Enron, Volkswagen examples)
• Comparative tables clearly differentiate Agency vs Stewardship and Agency vs Stakeholder perspectives
• Models of Corporate Governance
• Compares four broad models:
• Anglo-Saxon (outsider) Model – Dispersed shareholding, unitary boards, strong capital markets, activist investors, tight disclosure regime
• German Model – Two-tier boards, co-determination, bank-centric finance, cross-shareholding, stakeholder orientation, emphasis on supervisory board and employee representation
• Japanese Model – Keiretsu structure, main bank system, large insider boards, government influence, reforms post-Companies Act 2015 and Corporate Governance Code 2021
• Indian Model (modern) – Concentrated promoter ownership, rising institutional ownership, mandatory CSR and BRSR, key governance issues (family control, independent director shortages)
• Indian Model (ancient) – Kautilya's rajadharma, dharma–artha–kama, Rajarshi leadership, Mandala theory, Yogakshema and CSR, whistle-blowing analogues in Arthashastra
• Board and Board Committees – The Epicentre of Governance
• Detailed treatment of:
• Legal position of directors; composition norms (minimum/maximum numbers, women director, resident director, independent director thresholds, small shareholder director)
• Duties under Section 166 (good faith, due care, conflict avoidance, no undue gain, non-assignment of office)
• Board powers under Section 179, statutory duties, KMP appointments, and risk management
• Mandatory committees (as per Companies Act):
• Audit Committee – Composition, powers, terms of reference, role in financial reporting and internal control
• Nomination & Remuneration Committee – Board & KMP appointments, performance evaluation, remuneration policies
• Stakeholders Relationship Committee – Grievance redressal for investors
• CSR Committee – Applicability thresholds, composition, 2% CSR spending and monitoring
• Insider Trading & Whistle Blowing – Quirky Governance
• Explains:
• SEBI (Prohibition of Insider Trading) Regulations 2015 – Definition of insider, UPSI, trading plans, structured digital database, enhanced whistle-blower incentives
• Whistle-blowing – Internal vs external, open vs anonymous, pros/cons, organisational whistle-blower policies, Companies Act vigil mechanism and SEBI framework, Whistle Blowers Protection Act 2014
• Shareholder Activism, Institutional Investors & Class Action Suits
• Covers:
• Shareholder Activism—forms, advantages, disadvantages, Indian trends (Eicher Motors, Siemens, Godfrey Phillips, etc.)
• Class Action Suits—concept, advantages, disadvantages, Section 245 Companies Act, admissibility thresholds, IL&FS/Jindal/ICICI Securities ongoing suits
• Institutional Investors—types, ownership statistics (with NSE data), mechanisms of participation (voting, engagement, public statements, coalition building), SEBI's 2019 Stewardship Code
• CSR & Corporate Governance
• From Bowen and WBCSD definitions to Indian CSR:
• Business case for CSR (reputation, employee retention, cost savings, risk mitigation, community licence to operate)
• Critiques of CSR
• Gandhian Trusteeship as a normative base; Sarvodaya and 'bahujana sukhaya, bahujana hitaya' shaping redistribution and modern CSR
• Corporate Failures – Global & Indian
• Two major blocks:
• Global Failures – BCCI, Maxwell, Enron, WorldCom, Vivendi, Lehman Brothers, with each case structured as background → crisis → governance issues → aftermath
• Indian Failures – Satyam, Kingfisher, PNB Heist, IL&FS, ICICI–Videocon, Yes Bank; followed by a synthetic chapter on Common Governance Problems in Corporate Failures (financial manipulation, auditor failure, board passivity, CEO duality, weak risk management, regulatory gaps)
• Corporate Governance Reforms in India
• Brings together:
• Evolution from CII's 1998 voluntary code, Clause 49, Birla Committee, Naresh Chandra, Narayana Murthy
• Companies Act 2013 – Independent directors, CSR, vigil mechanism, class action suits, SFIO, e-governance
• SEBI LODR 2015 – Board composition, quorum, independent woman director, Board evaluation, RMC, enhanced RPT and disclosure norms
• Kotak Committee 2017 – Larger board size, skill matrix disclosure, strengthened committees, improved RPT norms, and how these have been folded into LODR

The structure of the book is as follows:

• Each chapter includes:
• Learning Objectives
• Conceptual exposition enriched with diagrams and tables
• Legal provisions with illustrations
• Case-based analysis
• Test Your Knowledge questions
• Practical Exercises for application
• Web resources and further reading
• Visual and Analytical Aids – The book includes:
• Shareholding pattern charts (e.g., NSE category-wise ownership)
• Board structure diagrams
• Theory comparison tables
• Governance–management relationship models
• Assessment-oriented Design – Past DU exam papers are strategically aligned with chapter topics, enabling students to map content with expected exam pathways

About the Author

Aruna Jha

Dr Aruna Jha is a Professor in the Department of Commerce at Shri Ram College of Commerce (SRCC), University of Delhi, with nearly three decades of teaching and research experience. She has authored books on Auditing and Corporate Governance, and her research papers have appeared in Scopus-indexed, Web of Science-indexed, and UGC-recognised journals. She has presented papers at numerous national and international conferences, and has worked on projects funded by government and research agencies, as well as CSR Impact Assessment engagements for corporates.

Anuj Bhatia

CA. (Dr) Anuj Bhatia is an Assistant Professor in the Department of Commerce at Shri Ram College of Commerce (SRCC), University of Delhi. He holds a Bachelor of Business Administration (BBA) and a Master of Commerce (M.Com.) from Sardar Patel University, Gujarat, where he was awarded Gold Medals at both the undergraduate and postgraduate levels for academic excellence. A UGC NET-JRF qualifier, he secured the Best Performance Award—ranked 1st nationally—in the National Accounting Talent Search Examination (Senior Level) conducted by the Indian Accounting Association in 2015. At SRCC, he teaches Auditing and Corporate Governance, Financial Management, and Corporate Accounting. His scholarly work has appeared in prestigious international journals and books, including ABDC 'A' Category publications.