The investor community in India has underlined that a robust corporate governance system is needed to draw the support of investors.
A FICCI-Grant Thornton report on corporate governance says 84% of the companies felt compliance with Clause 49, a provision in the listing norms which ensures transparency, and the quality of disclosures have improved investor perception about companies.
Under Clause 49 of the Listing Agreement, a listed firm must have a board with at least 50% independent directors or non-executive directors (in case the chairman is an executive).
If the chairman is non-executive, at least one-third of the board should comprise independent directors.
The report says companies are keen to comply with the non mandatory provisions of Clause 49 to improve transparency and disclosure.
Interestingly, all respondents have felt that they have benefited by complying with Clause 49, while in the previous study only 68% felt compliance to the rule helps enhance investor interest.