Effectiveness of Various Aspects Of Corporate Governance – A Survey

The Companies Act, 1956 is the principal landmark legislation that governs companies in India. The Act prescribes provisions for protection of the interests of the investors, creditors and public at large but at the same time permits the management to utilize its resources for optimum results and prosperity. In the functioning of corporate sector, along with freedom of operation of companies, protection of investors and shareholders are considered equally important. The Companies Act enables a statutory platform for essential Corporate Governance requirements essential for functioning of the companies with transparency and accountability, recognizing and protecting the interests of various stakeholders. In response to the changing business environment, the Companies Act, 1956 has been amended from time to time so as to provide more transparency in corporate governance and protect the interests of small investors, depositors and debenture holders, etc. Corporate Governance is the mechanisms by which the values, principles, policies and procedures of a corporation are inculcated and manifested. The Companies Act, 1956 has been amended from time to time in response to the demands of the corporate sector and sometimes to plug the holes detected by the administration in enforcing various provisions. The recent amendments constitute a good step towards improving corporate governance in this country.