UPSC Mains 2015 · GS II · Q14 · 12.5 marks · 200 words

In the light of the Satyam Scandal (2009), discuss the changes brought in corporate governance to ensure transparency, accountability.

हिन्दी में

सत्यम् कलंकपूर्ण कार्य (2009) के प्रकाश में कॉर्पोरेट शासन में पारदर्शिता, जवाबदेही को सुनिश्चित करने के लिए लाए गए परिवर्तनों पर चर्चा कीजिए।

Transparency and AccountabilityStatutory and Regulatory Bodies

How a topper answered the closest question

Toppers wrote this one in a test series: “In context of the need to strengthen corporate governance, the Kotak panel report has called for a major overhaul in norms for listed companies. Critically discuss the impediments to corporate governance in India and evaluate how the recommendations can help in overcoming them.”

Shubham KumarAIR 1 · CSE 2020 · 155 wordsTheir whole copy

Opening · a definition

Corporate Governance refers to process, measures, administration in corporate world for their governance.

Kotak Pannel suggestions :-

Body · points and prose

  1. Strengthening Agencies - like SEBI so that it can monitor well and promote good corporate governance.

  2. Audit

  • making audit more transparent
  • regular audit by third party
  • penalising for lapse in audit process.
  1. Independent Directors (IDs) → measures to elect them. → making them truely independent → protection of minority stakeholders → presence of IDs for meetings. → Increasing IDs from 33% to 50%.
Diagram
Affect minority stakeholders ^ | Major companies are owned by Individuals/Family | Impediments / | \ Proper Audit process Low transparency Protection for whistle blowers / \ Interests of Minorities Enforcement of Stakeholders are ignored Contracts | setting up of separate courts could help

Few suggestions :-

(1) Enforcement of contracts - India performs low in this area as reflected in Ease of Doing Business ranking.

(2) Audit → It should be regular & transparent.

(3) Role of Independent Directors they should promote interests of minority stakeholders as well -

(4) Closing of Shell Companies

(5) Bringing Economic Offenders to Justice

Close · a summary

Recommendations of Kotak Committee will help in strengthening corporate governance in India.

1 more topper’s answer to this question, part by part, and how they all approached it: open the question.

Toppers’ answers to other close questions

Source: UPSC, Civil Services (Main) Examination 2015, General Studies Paper II, Q14. The paper on upsc.gov.in. Themes and links to toppers’ answers are by UPSC Grade, not by UPSC.