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BRICS Civil Forum
Global Governance and Development Finance
Corporate Governance: The Global Scenario with reference to India
Professor Ram Kumar Mishra
Director, Institute of Public Enterprise
Corporate Governance
 Corporate Governance is, “the framework of rules,
relationships, systems and processes within and by
which authority is exercised and controlled in
corporations.”
 It encompasses the mechanisms by which companies, and
those in control, are held to account.
 Corporate governance influences how the objectives of the
company are set and achieved, how risk is monitored and
assessed, and how performance is optimised
Significance of CG
 Changing Ownership Structure
 Importance of Social Responsibility
 Global Competition
 Indifference on the part of Shareholders
 Regulatory control
 Accounting and transparency
BRICS: Profile
48.0
67.0
59.0
Chi na South
Africa
29.0
52.0
199.7
2 493
12789
2.9%
147.1
1 850
12993
3.0%
1250.2
1 676
1389
5.6%
1367.0
7 298
5414
14.3%
Brazil Russia India
Global Competitiveness Rank
(out of 144)
Population (in millions)
GDP (in billion US$)
GDP per capita (in US$)
GDP as percentage of world
total
50.8
408
8066
0.7%
BRICS: CG background
Brazil Russia India
Chi na South Africa
Irregular payments and bribes
65
120
99
67
47
Favoritism in decisions of government
officials
Organised crime
80
127
92
34
110
122
114
81
98
111
Ethical behaviour of firms
84
119
81
58
48
Strength of auditing and reporting
standards
Efficacy of corporate boards
42
123
44
72
1
38
124
75
91
1
The World Economic Forum (hereafter WEF) compiles a Global Competitiveness Report (WEF, 2012). This report
analyses 12 different pillars of competitiveness, each consisting of different factors. This competitiveness ranking is an
indicator of many issues, including factors such as the quality of education, infrastructure and health care. Of particular
interest to this study, however, is the first pillar - examining the institutions. The factors below were chosen from the
first pillar of the 2012-2013 WEF Global Competitiveness Report for comparison between the BRICS countries.
Ranking in selected factors (out of 144 countries)
Contribution: BRICS
 BRICS account for more than 40 per cent of the global
population, nearly 30 per cent of the land mass, and a share in
world GDP was 25 per cent in 2010 (BRICS Report, 2012:11).
 According to the BRICS Research Group, 2012, the five BRICS
countries have collectively contributed more than 50% of the
global economic growth.
 The study predicts that by 2030 the five BRICS countries will
overtake the G8 countries (France, Germany, Italy, Japan, United
Kingdom, United States, Canada and Russia) in terms of real
cumulative GDP.
World Governance Index
 Brazil:
 Russia:
 India:
 China:
 South Africa:
 Evaluating countries based on peace and security, rule of law,
human rights and participation, sustainable development and
human development
CG Compliance: BRCIS
Michelle I Caron, Influence of Corruption on Corporate Governance Standards, Emerging Markets Journal, Volume 2 (2012)
BRICS: Transparency International Index
Countries
Brazil
Russia
India
China
S.Africa
Rank
76
119
76
83
61
CG Codes: BRICs
Brazil
Russia
India
China
South Africa
Issued by the Brazilian Institute of Corporate
Governance (IBGC, 2009)
Issued by the Federal Service for Financial Markets of
the Russian Federation (EBRD, 2014)
Companies Act 2013 Ministry of Corporate Affairs,
GoI
Issued by the China Securities Regulatory
Commission (2004)
Issued by the Institute of Directors in Southern Africa
(King III) (2011)
Comparative Analysis of Good CG Practices
CG Practices
recommended in the UN
guide
Brazil
Russia
China
S. Africa
India
Ownership Structure and the
exercise of control rights
9
9
8
8
1
Financial transparency and
information disclosure
7
8
6
6
3
Auditing
7
7
6
7
6
Corporate Responsibility and
Compliance
5
5
1
5
3
Board and management
structure and process
18
15
15
15
13
Source: Comparative Analysis of the Corporate Governance Codes of the Five BRICS Countries,
Contabilidade, Gestão e Governança - Brasília · v. 17 · n. 3 · p. 49- 70 · set./dez. 2014
BRICS: Key Issues in CG
 In emerging markets such as BRICS it is found that any profits for
shareholders are eroded by the shadier legal frameworks and poor
corporate governance practices (Hallam 2012:13)
 Although, each of the BRICS countries offer growth opportunities, they
all carry significant risks owing to their poor governmental structures,
business practices and legal frameworks. (Blackwell and Stippich 2012)
 Other key issues include :
 Poor CG practices hampering countries to mobilise finances in domestic and




international markets
Money laundering and terror funding
improving shareholder voice and enforcing rights
ensuring corporate integrity and disclosure and transparency
Protecting minority shareholders rights
Women on Boards
 Boards were considered a ―boys’ club,‖ with more than 40% of
companies still having an all-male board. Across continents, the
representation of women on boards is far from acceptable.
 Although in four European countries (Norway, Sweden, Finland, and
France) women occupy more than 20% of the seats
 In other countries including the United States, UK, Germany, and
New Zealand, women representation on boards is only between 8%
and 16%.These countries are in the list of top 25 countries.
 The proportion of women in developed economies like Japan (0.9%),
UAE (1.2%),
 The BRIC nations—Brazil (5.1%), Russia (5.9%), and India
(4.8%)—is minimal.
 Several countries such as Peru and Morocco have only all-male boards
Women Climbing up the ladder!
 The highest proportions of women with senior roles are in the
BRICS nations–Brazil, Russia, India, China, and South Africa.
 women comprise 30 percent of senior management positions, which
is higher than the global average (24 percent).
 none of these countries have enacted compulsory quotas or legislation
addressing this issue.
 Russia has the highest proportion of women in senior management
globally (43 percent) without this type of gender programming.
 Between 2012 and 2013, China doubled the number of senior
management roles held by women from 25 per cent to 51 per cent.
Work done by Maria Saab, J.D., research fellow at the New America
Foundation,And a contributor to New America’s Global Gender Parity
Initiative.
 The
Credit Suisse Research
Institute’s CS Gender 3000 report
for 2016 indicates that companies
with higher participation of women
in decision-making roles continue
to generate higher market returns
and superior profits.
 Based on the analysis of Credit
Suisse Gender 3000, which
encompasses
27,000
senior
managers at over 3,000 companies,
the number of women on boards in
India has doubled over the past six
years from 5.5 percent in 2010 to
11.2 percent in 2015.
Indian Scenario
 A study done by Bloomberg shows today, there are 22 female chief
executive officers of publicly traded companies in India, the developing
country with the second-most women holding CEO or equivalent posts,
and China being at No. 1
 India’s Companies Act of August 2013 requires all businesses trading on
the stock market to have at least one female director. Currently, about 6
percent of publicly traded companies in the nation have women on their
boards.
 Buoyed by wider educational opportunities, laws mandating female
participation in corporate governance and government support for
children and families, businesswomen in emerging nations are narrowing
the gap with their more developed counterparts.
 Ten years ago, there was just one female director of an emergingmarket-based company. Now there are more than 1,500, according to
data compiled by Bloomberg.
The 2015 Census is the only one of its kind in South Africa that provides the most
comprehensive and insightful analysis of women in leadership, spanning across various
organisational entities and economic sectors in South Africa






Women are mostly appointed in NonExecutive directorship positions.
Only 9.2% of women holding Chairperson
positions - women remain a minority
within a minority.
Only 2.4% women are appointed in CEO
positions.
Women are still excluded from the most
important key decision-making positions
within organisations.
Black women are best represented at
Director level, White women are more
representative
at
the
Executive
Management level.
The research conducted also draws on
international benchmarks and sites South
Africa as a top performer amongst BRICS
countries with almost double the
percentage of women Directors, compared
to its nearest competitor, China (at 11.1%).
Financial Characteristics of Companies
with Strong Female Leadership
Projections for Reaching 30% Women
Boards
Key Points: India
 Policy regulations are applicable for corporate and public





sector alike
Public opinion being generated for support to issues on
curbing financial frauds
Media playing a key role
SOEs have higher level of compliance
Women participation –a high priority aspect
CSR is a key element
Thank You