Corporate Governance Disclosure for Complex Ownership Structure in India

The transition of a national economy to global economy affected the corporate operation in a varied manner. The dichotomous models of corporate governance call for clarity in corporate objectives, strategies and responsibilities of the modern corporation. The dichotomous approaches towards corporate disclosure are influenced by ownership models, that is, concentrated (e.g., Germany and Japan) and dispersed (e.g., the United States [USA] and the United Kingdom [UK]). The dispersed ownership model implicates arm’s length relationships between shareholders and managers, whereas opposite trend demonstrates concentrated ownership. It implicates heavy reliance on large shareholders for bankrolling the firm. Post-reform market in India developed complex ownership structure which represents both concentrated and disperse trends. Consequently, learning curve for corporate governance disclosure in this type of ownership structure is yet to be consolidated. The present research article draws up a case for improvements in the corporate governance disclosure and attempts to indicate a smarter corporate governance disclosure framework for complex ownership structure in India from the learning of selected jurisdictions (the USA, the UK, Japan and Germany) and best practices. The research article also spotlights on the level of convergence of the corporate disclosure norms in India with the global standards. The scope of this article is limited to non-financial disclosure.