ISB hosted the 4th International Conference on Corporate Governance in Emerging Markets at the Hyderabad Campus along with IFC-Global Corporate Governance Forum (IFC-GCGF) and Indira Gandhi Institute of Development Research (IGIDR).The three-day conference was held in India for the first time. The conference series brought together researchers from around the world investigating the impact of corporate governance on firm performance and economic development, and the role of legal, economic and political institutions in shaping corporate governance systems in emerging markets.

While the new Companies Bill awaits the presidential nod, practitioners and researchers at a roundtable that was part of the conference discussed the success and challenges of corporate governance in India.

The panel comprised practitioners Mirza Baig, founder and MD of HIKMA Governance Consulting (HGC), Rajeev Batra, Partner and Co-head of Governance, Risk and Compliance services, KPMG, Shyamala Gopinath, Chairperson, Clearing Corporation of India and Nawshir Mirza, Professional Independent Director, and former National Director of Audit and Accounting Services. The discussion was moderated by Sanjay Kallapur, Professor, ISB. The core issues discussed included the role of regulators, directors and executives in improving the current state of corporate governance in India.

Baig set out the context by introducing the perspective of international investor interested in India as a destination for foreign capital. He argued that while India had thus far lagged behind Asian rivals such as Singapore in its corporate governance framework, the proposed Companies Bill and especially Clause 49 would prove to be game-changers, placing India in the vanguard on corporate governance in Asia.

Talking about the 2013 Companies Bill, Batra struck a sceptical note.  He opined that financial irregularities and fraud could remain masked and called for more diligence and active participation from the board of directors, especially when it came to risk management and monitoring of strategic risk.

Gopinath made a compelling argument for why the banking sector needs serious regulatory oversight while Mirza offered a dissent to the prevailing consensus enshrined in the Companies Bill that making independent directors more accountable would improve corporate governance outcomes.

The moderator, Kallapur provided direction to the discussion, raising a number of pertinent questions and allowing clarifications. The assignment of regulatory authority to the NFRA was also widely welcomed. As Mirza noted, the Institute of Chartered Accountants of India (ICAI) as an industry and lobbying body was not right for the regulatory task.

The panel ended on agreement that the Companies Bill represented much-needed reform, panellists such as Batra and Baig also cautioned that the compliance-oriented culture in the Indian corporate sector could prevent real change.