The KLS Centre for Studies in Business and Corporate Law (KCBCL), under the aegis of the Department of Business Law and Corporate Governance, conducted a webinar on the topic “Effecting Competition through Corporate Governance” on 2nd April 2022.
Speaking at the webinar, Prof. (Dr.) V. Shyam Kishore, Professor & Associate Dean, Alliance School of Law, Alliance University stated that corporate governance primarily deals with agency problems, and the problem which is shared by the principal and the agent. In western countries, the shareholders’ actions are not coordinated, but they are dispersed. The focal point is how the interest of the principal can align with that of its agents, he explained. In India, the problem is slightly different as there is a controlling group of shareholders in each company, he said, elaborating that these controlling groups of shareholders determine what actions are supposed to be taken.
He then stated SEBI LODR to be a monitoring mechanism. The speaker went on to explain that there has been a gradual shift from shareholder theory to stakeholder theory of Corporate Governance and that corporates have started acknowledging not just the shareholder’s interests but also other stakeholders such as creditors, vendors, customers, environment and the society at large. Therefore, a company should be run in a manner that benefits the interests of other stakeholders as well, he said, adding that in today’s terms it is known as Environment Social Governance (ESG) standards.
The speaker shed light on Section 166 of the Companies Act, 2013 which specifies that a director of a company shall act in good faith in order to promote the objectives of the company for the benefit of its members as whole and in the best interests of the company, its employees, the shareholders, the community and for the protection of government.
Prof. Yugal Kishore, Adjunct Professor, KLS also spoke on the occasion. The talk followed a question-answer round facilitated by Ahona Mukherjee, Student Member, KCBCL. A vote of thanks was proposed by Prof. Rajdip Bhadra Chaudhury, Faculty Member, KCBCL. The Rapporteurs of the session were Mandavi Banerjee and Snigdha Mohapatra, Student Members. Around 50 participants joined the webinar.