Contemporary Corporate Governance

Asish K Bhattacharyya

Distinguished Professor at Shiv Nadar University (Institution of eminence) in India and author of the book Contemporary Corporate Governance published by Nonlinear Insights- Publication Division

Many universities have included corporate governance in UG and graduate management programme syllabuses. This is necessary because management graduates who will pursue their careers in the corporate sector or start entrepreneurial ventures must understand the principles and practices of corporate governance. The question yet to be resolved is what content and pedagogy are suitable for teaching corporate governance to management students.

In the corporate sector, management graduates are unlikely to get the role of compliance officer or a role in the legal department. Those positions are usually reserved for a professional company secretary or a law graduate. Even when management graduates occupy general management positions after gaining experience in a functional role, they get the support of the legal department or the secretarial department to know the law prevailing at that time. Therefore, the focus should not be on discussing the current laws relating to corporate governance. Another reason for not focusing on laws is that the corporate governance course is usually a two-credit course (45 or 30-hour classroom sessions); the laws cannot be discussed beyond the appreciation level, as case laws cannot be discussed in detail due to time constraints. Although discussing case laws in class is interesting, it only adds value to management graduates if sufficient time is left to teach corporate governance principles and practices after discussing case laws in detail. For the same reason, the chronology of the evaluation of corporate governance cannot be discussed in detail.

The focus should be on explaining the corporate governance principles — what and why. Reference should be made to regulations in different countries as examples of implementing the principles and prevailing corporate governance practices. A detailed discussion on international corporate governance is not required except for some discussion of Germanic and Japanese corporate governance.

I give an example. Students should understand that corporate governance challenges arise because of the separation of ownership from control and that situations might arise irrespective of the firm structure. I spend sufficient time discussing information asymmetry and how the separation of control might arise in different firm structures, including a sole proprietorship firm. This leads to the discussion on board structure, functions, and reasons for board failures.

Students should also critically examine why the institution of independent directors has failed in spite of significant new regulatory initiatives over the past half-century. Students should also appreciate that although corporate governance codes (regulations) in different countries are based on the assumption that managers demonstrate agent-like behaviour and the board’s responsibility is to monitor the managers, in reality, boards have gradually transformed into advisory boards because innovation is critical to survival and growth, and innovation prospers in an open environment. Moreover, with the increase in the complexity of business models, the knowledge gap between the manager (CEO and their team) and non-executive directors has widened so significantly that monitoring the manager effectively has become extremely difficult, if not impossible. The audit role has become critical in protecting the company’s interests.

The above are only a few examples.

Instructors should design a course structure that meets the needs of management students. It cannot be the same as what is appropriate for law students.

Pedagogy and content for management students are also appropriate for UG and PG programmes in Commerce.


  1. Prof Arpita Ghosh (Indian Institute of Management Calcutta) says:

    The book, “Contemporary Corporate Governance” authored by Prof. Asish K. Bhattacharyya, is one of the must-reads for management students, executives, and the director leaders on the Boards. The book traces the evolution of corporate governance to the contemporary discourse on the subject. The author brings the intricate theories and models of corporate governance to life seamlessly with real-life examples, which come from his rich experience in teaching the subject and the practical insights he has gained while on the boards of several companies over the years.

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