Rights of Minority Shareholders (to enhance the power of the minority shareholders)

 Right to appoint a director

 Right in decision making
 Oppression and management
 Rights with respect to reconstruction and amalgamation
 Piggybacking - When a majority shareholder sells their shares, a minority shareholder has
the right to be included in the deal.
 Provision of compulsory dividends to the minority shareholders

Reverse Mergers

 It’s a way for private companies to go public without going for an IPO which can take a long
time
 It’s done through buying shares of a shell company
 It’s done without raising any capital
 However, the investors must thoroughly check the shell company that they are buying
shares of for any malpractice and there is no debt on their end.

Executive Pay

 Say on Pay – Giving the shareholders more rights when it comes to deciding remuneration
packages.
 Shareholders should have more rights
 Pay is usually given to bring better people into the firms

Corporate Governance in Family Owned Businesses

Challenges

 Innovation is a big challenge

 Retaining talent
 Efficient Succession planning
 Need for new technology
 Nepotism
 Role confusion
 Autocracy
 Placing family interest first
 No proper independent directors
 Audit committee should be there
 Proper remuneration

Models of Measuring Corporate Governance

 Reputation Quotient - The quotient is the result of an appropriate combination of 6

conceptual dimensions (emotional appeal, products and services, vision and leadership,
workplace environment, social and environmental responsibility, financial performance) that
are evaluated by a sample of managers in two subsequent phases: ”nominations phase” and
”ratings phase”
 Reputation Index - is based on the internal evaluation of non quantitative factors produced
by distinctive groups of stakeholder (4). The key factors contemplated by such index are: the
 leadership, the organizational culture, the innovation and the strategy. The stakeholder
groups assign a score between 1 and 9, thus a weighted mean is computed where the
weights are defined subjectively by the management on the basis of the experience. Finally
the score is converted to a rating according to predefined subjective thresholds
 Fortune’s Most Admired Companies (FMAC) - approach aims at ranking the 100 American
companies with the best reputation. The objective is achieved by means of a very extensive
survey composed of 57 questions and submitted to 100,000 executives, chiefs and financial
analysts.
 RepTrack - The model is based on 7 ’pillars’ useful to create a strategic platform of
communication between the company and the stakeholders. Among those dimensions we
cite: citizenship, leadership, innovation. The methodology is quite standard since the
interviewed are asked to give a score to each specific dimension and finally a rank of the
company is produced. The strength of RepTrack Index lays on the large dimension of the
sample, on the standardization of the results and on the long experience and gained
confidence

Corporate Governance in Indian PSU’s

https://www.slideshare.net/kunalaggarwal2007/corporate-governance-in-ps-us

 Promotions in banks have typically been seniority based. This meant many people are in
senior positions over others. Government has also been choosing from small pool of people.
It is never wise to have people taking decisions on thousands of crores earning only in
thousands. Board members are neither compensated well nor chosen wisely. Also, because
most CEOs take charge in their late 50s they have a short-term vision and there is no
continuity.
 Proper definition of strategy and purpose, including clear citizen and service users’ quality of
service measures, and defined key performance indicators.
 Clear organizational structures, reporting lines and processes, defining clear roles and
responsibilities, as well as governance oversight bodies, such as audit and risk committees.
 Talent management, as the public sector should be regarded as a good attraction and
development of talent.
 Promotion of ethical conduct by establishing codes of conduct and whistleblowing hotlines.
 Clear definition of accountability for public wealth policies, transparent internal and external
reporting, and use of appropriate accounting policies and standards, as well as clear
performance measures.
 Focusing on the Lines of Defense (internal audit, risk management, control and compliance)

Corporate Governance Issues in Sports

 https://tejas.iimb.ac.in/articles/Tejas_September%20Edition_Article%201.pdf

Government Models

 Korean
 German
 Japanese
 Nordic

Recent Corporate Crisis

 Independent Director issue
 Dual role of chairman and director
 Tesla