6-1 Corporate Governance Reforms and Financial
Disclosures: A Case of Indian Companies
点：The corporate governance of a firm is disciplined both by external as well as internal
firms often adopt internal disciplining devices 其中一种就是 Financial Disclosures
作用：investors and other outside parties can monitor firm performance by reducing information asymmetries.
corporate governance has become an important issue to the Indian firms as they
increasingly interact with the regulators and investors from the developed markets. As the
Indian firms tap global markets for raising capital, they need to display strong commitment to
corporate governance so that investors do not discount ...view middle of the document...
In this regard, in Germany, the 1998 corporate governance reform aimed to redefine
the functions of the managerial board and also of the supervisory body. As a result of these
undertakings the managerial board must report to the supervisory body regarding several issues
like: risk management, budget and business plans. Also, the supervisory body must
have at least four annual meetings and has an enhanced role in the selection and the relationship
of the auditors.
In another train of thoughts, the French corporate governance law does little in regard
to the enhancement of the powers of the board of directors, stipulating only the separation
between the position of the chairman of the board and that of chief executive officer. There
have been also some incentives regarding the information of the directors from sources outside
the firm. According to the law adopted in 2001, directors can require and receive all the
information’s they need in order to carry out their duties (for a full brief on this reform see
Menjucq, 2005). But, an amendment made two years later to this law prevented individual
board member form directly accessing the firm documents.
Nevertheless, in Italy, the legislative reform has enhanced the internal governance act
stating that chief executive officers must inform the board of directors regularly, while also
at least one member from the board of directors and the auditors’ board must be appointed
by minority shareholders. The reforms undertaken also strengthen the authority and
attributes of the board of auditors enhancing it independent characteristics.
On the same idea, France and Italy have both enhanced the self-dealings regulations
regarding majority shareholders transactions.
4.2 ENHANCING THE POWERS OF THE SHAREHOLDERS
If we analyse the American shareholder we can see that it has become more powerful.
The main American stock exchanges, NYSE and NASDAQ, have both amended their regulations
in order to require listed firms to obtain the approval of their shareholders in order to
grant compensation plans for their managers. Moreover,...