A Study of Corporate Governance Disclosure Practices in Select

Indian Companies with Special Reference to Fast Moving

Consumer Goods (FMCG) Sector

A
Synopsis
Submitted for the Registration of Doctor of Philosophy
In Accountancy and Law
(Commerce)

UNDER THE SUPERVISION OF SUBMITTED BY-

Prof. Nidhi Sharma Lakhan Veer Singh
Department of Accountancy & Law Research Scholar
Faculty of Commerce

August-2019
Dayalbagh Educational Institute,
(Deemed University)
Agra
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INTRODUCTION

The term Corporate Governance itself explain the meaning that it is an act of managing

corporate. Corporate Governance is a set of principles and guidelines on which a company is

governed. It ensures that the company works in such a manner to achieve its goal by taking into

consideration the benefit of each stakeholder including directors, shareholders, employees and

customers etc. Corporate governance is typically perceived by academic literature as dealing

with ―problems that result from the separation of ownership and control.‖ The internal structure

of Corporate Governance includes the Board of Directors, the creation of independent audit

committees, rules for disclosure of information to shareholders and creditors and control of the

management.

MEANING OF CORPORATE

A corporation is a business entity that is owned by its shareholder(s), who elect a board of

Directors to oversee the organization‘s activities. The corporation is liable for the actions and

finances of the business – the shareholders are not. The process of capital accumulation that

facilitates development of economies by fuelling growth of its various sectors such as industry,

agriculture, infrastructure, trade and commerce has become institutionalized by the corporation.

MEANING OF GOVERNANCE

The term Governance is derived from the Latin word ―Gubernance‖ which means ―to steer‖.

Corporate Governance means direction and control of a company.

Governance means the process of decision making and the process by which decisions are

implemented. Governance can be used in several contexts such as corporate governance,

international governance, national governance and local governance.

There is no single definition of corporate governance which is acceptable to all people. Most of

the experts have defined Corporate Governance in their own way. Some of the popular

definitions are given below-

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DEFINITIONS OF CORPORATE GOVERNANCE

In the narrowest sense, Noble laureate Milton Friedman defined corporate governance as ―the

conduct of business in accordance with shareholders‘ desires, which generally is to make as

much money as possible, while conforming to the basic rules of the society embodied in law

and local customs.‖

According to Cadbury Committee, UK, - ―Corporate Governance is concerned with holding

the balance between economic and social goals and between individual and communal goals.

The governance framework is there to encourage the efficient use of resources and equally to

require accountability for the stewardship of those resources. The aim is to align as nearly as

possible the interests of individuals, corporations and society.‖

The OECD Principles of Corporate Governance states that ―Corporate governance involves a

set of relationships between a company‘s management, its board, its shareholders and other

stakeholders. Corporate governance also provides the structure through which the objectives of

the company are set, and the means of attaining those objectives and monitoring performance

are determined.‖

Standards & Poor‘s has defined Corporate Governance as ―the way a company is organized

and managed to ensure that all financial stakeholders receive their fair share of the company‘s

earning and assets.‖

The Kumar Mangalam Birla Committee constituted by SEBI has defined- ―Strong corporate

governance is indispensable to resilient and vibrant capital markets and is an important

instrument of investor protection. It is the blood that fills the veins of transparent corporate

disclosure and high quality accounting practices. It is the music that moves a viable and

accessible financial reporting structure.‖

N.R. Narayana Murthy Committee on Corporate Governance constituted by SEBI has

observed that- ―Corporate Governance is the acceptance by management of the inalienable

rights of shareholders as the true owners of the corporation and of their own role of trustees on

behalf of the shareholders. It is about commitment to values, about ethical business conduct and
 3

about making a distinction between personal and corporate funds in the management of a

company.‖

According to American Management Association, ―Corporate Governance is how suppliers of

capital get managers to return profits, make sure managers do not misuse the capital by

investing in bad projects, and how shareholders and creditors monitor managers‖.

FOUR PILLARS OF CORPORATE GOVERNANCE

The value of corporate governance lies on its four pillars, on which OECD principles of

Corporate Governance are based-

1)
Transparency

Four Pillars of
2) Corporate 4)
Accountability Governance Responsibility

3) Fairness

1) Transparency- Companies should provide timely and accurate disclosure on all matters

regarding its financial situations, performance, ownership and Governance structure.

2) Accountability- The corporate governance framework helpful in providing strategic

guidelines of the company, effective monitoring of management and the board‘s accountability

towards company and shareholders.

3) Fairness- To protect the investor, to prevent the improper trading practices helpful in

developing confidence in the market. The corporate governance framework should ensure the

equitable treatment of all stakeholders, including minority and foreign shareholders.

4) Responsibility- A company should be responsible towards the corporate, shareholder and

public with the help of proper channelization of Corporate Governance Framework.

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BENEFITS OF CORPORATE GOVERNANCE TO A CORPORATION

The key contributions of good corporate governance to a corporation includes –

1) Creation and enhancement of a Corporation‘s competitive advantages.

2) Enabling a corporation perform efficiently by preventing frauds and malpractices.

3) Providing protection to shareholders‘ interest.

4) Enhancing the valuation of an enterprise.

5) Ensuring compliance of laws and regulations.

CORPORATE GOVERNANCE: THE INDIAN SCENARIO

In the late 1980s and the early 1990s, in America there is a huge problem of scams and failures

occurring in the corporate sectors therefore to meet out these problems a committee was set up

in the year 1991 and that committee is named as ― Cadbury Committee‖. It was established by

the Financial Reporting Council, The London Stock Exchange and the Accountancy Profession

to meet out the aim of Financial Aspects of Corporate Governance. The committee published its

final report on 1st December 1992. This committee includes the various aspects like- Reviewing

the structure and responsibilities of Boards of Directors and recommending a Code of Best

Practice, Considering the role of Auditors and addressing a number of recommendations to the

Accountancy Profession and Dealing with the Rights and Responsibilities of Shareholders.

The history of corporate governance in India is not very old. Until 1991, India pursued socialist

policies. It was in 1991 that the Indian government faced a fiscal deficit. The crisis led to a

series of reforms aimed at the opening up of the previously protected economy. Some reforms

were reduction in state aided financing and privatization in the various sector. Pressed by a need

to face increasing competition, Indian firms began to tap world capital markets for equity. This

growing interface with world markets led to efforts aimed at augmenting corporate governance

standards. The pioneer endeavors in this area were setting up of the Confederations of Indian

Industry (CII) Code for Desirable Corporate Governance in 1998.

The Securities and Exchange Board of India (SEBI), which was set up in 1992, constituted

two committees to focus on the issue of corporate governance. The committee chaired by
 5

Kumar Mangalam Birla, chairman of the Aditya Birla Group, submitted its report in the year

2000, and the committee chaired by Narayana Murthy, founder and chief mentor of Infosys,

submitted its report in 2003. These committees played an instrumental role in laying the

foundations of corporate governance in India. They have had maximum impact on changing the

corporate governance complexion in India. The recommendations of these committees brought

to light the fact that governance reforms are focused on two major areas—disclosure laws and

role and composition of board of directors. SEBI‘s major reforms have been orchestrated

through Clause 49 of the listing agreement. Prior to adoption of Clause 49, India corporate

governance mechanisms were not on a par with world standards. Clause 49 brought in a number

of key changes in corporate governance practices and disclosure in all listed companies. An

amendment to the Clause 49 in 2003 made it mandatory for every public company listed on

Indian stock exchange to sign the listing agreement. Clause 49 was further revised in 2004 and

came into effect in the year 2006. The main focus of the revised clause has been to protect the

interests of investors through enhanced governance practices and disclosure. Listing

Department monitors the compliance of the companies. Clause 49 of the Listing Agreement by

Securities Exchange Board of India explains on the issue of Corporate Governance and endorses

the standards under which the Companies are ordered to work. After the enactment of the new

Companies Act, 2013; Corporate Governance practices in the most reputed listed Indian

companies have been questionable on various dimensions and occasions, which required the

demand for the improvement of the quality of Corporate Governance for this purpose the Kotak

Committee has been constituted on June 2, 2017, under chairmanship of Uday Kotak. Its

primary objectives were improving standards concerning Corporate Governance of listed

companies in India. The board decided to accept several recommendations of the committee

without any modifications, these are as Reduction in the maximum number of listed entity

directorship from 10 to 8, eligibility criteria of independent director, role of audit committee,

disclosures of utilization of funds, disclosure of expertise, disclosure of auditor credentials,

disclosure of related party transactions, etc.

6

The Organization for Economic Co-operation and Development (OECD) is

an intergovernmental economic organization with 36 member countries, founded in 1961. It is a

forum of countries describing themselves as committed to democracy and the market economy.

It gives First set of corporate governance principles in the year 1999 and a revised version was

released in 2004. To create legal and regulatory framework for corporate governance in various

countries OECD given six Principles and these Principles are- Ensuring the basis of an effective

corporate governance framework, The rights of shareholders and key ownership functions, The

equitable treatment of shareholders, The role of stakeholders in corporate governance,

Disclosure and transparency and The responsibilities of the board.

Deloitte Touche Tohmatsu Limited, (Deloitte), is a multinational professional

services network established in the year 1845 in the United Kingdom. Deloitte is one of the "Big

Four" accounting organizations and the largest professional services network in the world by

revenue and number of professionals. Deloitte provides audit, tax, consulting, enterprise

risk and financial advisory services. Deloitte (United Kingdom) given some principles regarding

corporate governance and these are- Board leadership and company purpose, Division of

responsibilities, Composition, succession and evaluation, Audit, risk and internal control and

Remuneration.

REVIEW OF LITERATURE

A Literature Review is text based knowledge which gives the critical points or idea about past

studies. Review of literatures emphasizes on what are the objectives, findings and theoretical

and methodological structure. This is the secondary source of the data and gives the relevancy

for the future study. Analysis of the review of literatures keeps the researcher knowledge up to

date on the particular topic. It provides the basis for any research area and helpful in setting the

goal of the future research. To design the Research meaningful researcher analyzes the various

reviews which are related with the Corporate Governance.

 7

INTERNATIONAL STUDIES RELATED TO FOREIGN COMPANIES

S. No Year Author Title of Paper Objectives Findings

Name
1) 2018 Igbekoyi Corporate To examine theIn this paper various factors like-
Olusola Governance and effect of
ACM, ACQ, BS, DAC and OS
Esther and Accounting corporate had a significant positive
Agbaje Information governance on relationship with accounting
Wale Disclosure in the quality ofinformation disclosure at 1% and
Henry The Nigerian accounting 5% level of significance
Banking Sector information respectively, while CBM had a
disclosed in
negative relationship but was
Nigerian banks.
insignificant. This paper shows
that corporate governance
contributes to the quality of
accounting information disclosed
in the banking sector.
2) 2017 Samiul Corporate To examine the The study shows a positive
Parvez governance relationship relation between corporate
Ahmed, practices in the between governance and performances of
Rahatul banking sector performances banks, the statistical
Zannat of Bangladesh: of commercial insignificance of the relation
& Sarwar do they really banks with raises concern regarding various
Uddin matter? corporate issues of corporate governance in
Ahmed governance the financial sector of Bangladesh.
factor along
with some
internal and
macroeconomic
variables.
3) 2016 Babafemi Evaluation of To examine This study reveals that the
O. Corporate corporate Nigerian banking is faced by
Ogundele, Governance governance multiple issues of governance
Ahmad Practices in practices in the ranging from non-disclosure of
Nasseri & Emerging context of information. They suggest
Hassan Markets (A case emerging multiple factors and influences
Yazdifar study of countries. exist to shape the corporate
Nigerian governance practices within most
Banking commercial banks.
Industry)
4) 2016 Madan Lal Voluntary To study the This paper shows that
Bhasin and Reporting of voluntary CG ―corporations are following less
Hasan Corporate Reporting than 50 percent of the items of CG
Mohamme Governance practices of 50 Reporting Index. Moreover, there
d Bamahros Information in corporations, is no significant difference among
Annual Reports: over and above the reporting scores across the
An Empirical the mandatory four industries.‖
Study of an requirements of
Asian Country Clause 49 of the
Listing
Agreement.
5) 2015 Ayesha A Comparative To determine The findings of the study indicate
Tabassum Review of the current state that the role of ‗Board of
Corporate of corporate Directors‘ was important.
Governance governance Comparative analysis across the
 8

Practices within within the banks indicated that there is

Banking banking difference in corporate
Sector(Private, industry. governance banks practices across
Public and To determine the three sectors.
Foreign Banks): the different
An empirical corporate
review governance
practices within
the banks
6) 2015 Rezwan Practices of To critically The study found that top
Mahmood Corporate observe the management influence as well
& Md. Governance in current as political pressure exists in
Moshin the Banking Corporate banking sector which affect the
Islam Sector of Governance lending decisions.
Bangladesh status and
practices in the
banking sector
of Bangladesh.
7) 2014 Andrew Corporate To examine The study indicates that the
Munthopa Governance corporate commercial banks in Malawi have
Lipunga Practices in governance adopted the ideals of corporate
Commercial practices of governance and are making
Banking Sector commercial considerable effort to adhere to
of Malawi: banks in a corporate governance
Evidence from developing requirements.
Annual Reports country.
8) 2014 Diana Corporate To determine This paper analyze that the
Weekes- Governance the level of companies which participated in
Marshall Disclosure corporate other markets proved to be a good
Practices: governance indicator of higher levels of
Evidence disclosure corporate governance disclosures.
from Barbados practices
undertaken by
the public
limited
companies listed
on
the Barbados
Stock Exchange
(BSE).
9) 2012 Kabir Md. A Comparative To analyzing the This paper reveals that the
Humayun Analysis of the corporate multinational banks were superior
And Ismail Corporate governance then domestic banks because
Adelopo Governance practices by multinational banks fellow the all
Practices in multinational norms of corporate governance as
Multinational banks in enhance their corporate
and Domestic comparison to governance strategies.
Banks in domestic banks
Zimbabwe in Zimbabwe.
 9

10) 2011 Shanta Corporate To Evaluate The Researcher has found that
Karand governance the practices of Corporate Governance codes
Mithunsark practices in Corporate properly to bring the authenticity
er private Governance in its operations and to bring the
commercial codes by the faith of the stakeholders as well as
banks-a study Private the people of Bangladesh.
on Khulna city Commercial
Banks of
Bangladesh

INTERNATIONAL STUDIES RELATED TO INDIAN COMPANIES

S. Year Author Title of Paper Objectives Findings

No Name
1) 2018 Pallavi Corporate To study the This study reveals that there are
Vartak Governance: A corporate few issues and challenges faced
Literature Review governance in by Indian companies on the issues
With A Focus On public sector of Corporate Governance.
Public Sector Undertakings in Corporate governance has now
Undertakings In India. playing role in private as well as
India To understand public sector is enactment of
the challenges Clause 49 & Company Act 2013.
faced to adhere
the CG
2) 2017 Prasanna Corporate To examine the This paper analyze the most
Pai governance in corporate trusted public sector banks and
banks in India governance most trusted private sector banks
and disclosure practices on the ground of Corporate
practices in Indian disclosure in Governance disclosures and thus
public sector and banks. are complying with the Clause
private sector 49 to a great extent regarding
banks the disclosure of important
parameters in their corporate
governance report.

3) 2017 Ms. Voluntary To examine the In this paper researcher found that
Neelam Corporate voluntary Voluntary disclosure index has
Bhardwaj Governance corporate been calculated on the basis of 33
and Dr. Practices in India governance statements, broadly 9 dimensions
Batani disclosure prescribed by voluntary
Raghaven practices followed guidelines 2009 and international
dra Rao by Indian corporate governance standards.
companies. The results of this study have
To benchmark the shown that voluntary disclosure
voluntary level is very low. As per the
corporate results of this study, although
governance voluntary corporate governance
practices of disclosure level is improving, yet
Indian companies the overall disclosure level is very
with the voluntary weak.
guidelines 2009
and International
corporate
 10

governance
standards.
4) 2016 Ramendra Practices of To analyze The study concludes that overall
Kumar corporate whether ―corporate governance‖ practices
Sharma governance in ―corporate of ―IndusInd Bank ―is good. The
&Prof. IndusInd Bank governance‖ performance of bank is increasing
Rahul policies plays key year on year from 2011 -12 which
Dhaigude role in profit is a sign of good governance.
earnings of the
banks.
5) 2016 Palaniapp Relationship To identify the In this paper, statistical analyses
an G and between relationship were made to measure the
Srinivasa Corporate between corporate relationship and its impact with
Rao P V Governance governance the help of correlation and
VS Practices and disclosure regression analysis. The study
Firms practices and implied positive and significant
Performance of firms impact with the corporate
Indian Context performance with governance disclosure and firms
respect to performance of manufacturing
profitability. firms in India.
6) 2015 Meenu Corporate To examine the It is found that, HDFC Bank
Maheshw Governance role of corporate believes in adopting and adhering
ari & Practices: A governance in to the best recognized corporate
Sapna Comparative SBI & HDFC, governance practices and
verma Study which are the continuously benchmarking itself
Of SBI & HDFC part of the against each such practice.
Bank public sector and
private sector
Respectively
7) 2015 Vidhu Corporate To enhance the Researcher found in this paper,
Shekhar Governance shareholders‟ the impact of corporate
Jha and Issues, Practices value and protect governance on productivity for an
Vikas And Concerns In the interest of organization. What are the various
Mehra The Indian other stakeholders codes on corporate governance?
Context – A by enhancing the Implementation issues in the
Conceptual Study corporate context of Indian companies. The
performance and role of corporate governance in
accountability. Public Sector Enterprises (PSEs)
and the role of the apex body for
public sector enterprises in India,
8) 2014 Sonia Corporate To evaluate the In this paper, ICICI Bank has
Sharma Governance corporate complied with the requirements of
Practices: A Case governance Clause 49 of the listing
Study of ICICI practices in agreement, as far as mandatory
Bank Ltd. banking sector information is concerned. But
particularly in the more efforts should be directed
ICICI Bank Ltd towards the compliance of non-
mandatory requirements like
fixation of retirement age of the
directors, selection criterion for
non-executive and independent
directors, etc.
 11

9) 2014 M. Corporate to analyze the This paper analyse the country‘s

Subraman Governance and level of disclosure government environment
yam, Disclosure on corporate especially legal and market
Himachal Practices in Listed governance infrastructure highly affect the
am Information practices among companies‘ rate of disclosure
Dasaraju Technology (IT) the biggest IT which then increases profitability.
Companies in companies in The results suggest that corporate
India India and its governance should be monitored.
effects on Good legislation and a market
performance and environment that is free from
profitability corruption are essential for
corporate governance disclosure
to be efficient.
10) 2014 Nidhi Corporate To examine the In this paper it reveals that the
Tyagi, Governance Corporate SBI disclosed all the necessary
Mohd. Practices in India: Governance disclosure, some are positive in
Atif & A Comparative Practices in SBI. nature as well some are in
Yusra Study of Selected negative.
Naseem Banks
11) 2013 Rajat Deb A study of To study the In this paper, the good corporate
Corporate corporate governance is a reality and Indian
Governance governance Banking sector has left no stone
Practices in framework in unturned to achieve this. In this
Indian Banks Indian banks. paper the primary research also
reflected the sheer sincerity of
senior bank‗s executive to take
this mission forward to the zenith
of success.
12) 2013 Ankita The Extent of To examine the The study contributes novelty by
Asthana Disclosure Code corporate measuring not only the disclosure
and M.L. of Corporate governance code practices which are mandatory
Dutt Governance in adopted b y and non-mandatory for the
India: A public and scheduled commercial banks
Comparative private listed at the stock market, but also
Study of Public s e c t o r banks in examines the exemplary
and their annual committees formed by banks both
Private Sector reports. in public & private sector
Banks showing their inclination and
intent towards forming additional
corporate governance committees
over and above the once which
are recommended by SEBI &
Reserve Bank of India (RBI) to
curb frauds.

NATIONAL STUDIES

S. No Year Author Title of Paper Objectives Findings

Name
1) 2019 Pankaj Corporate To study the corporate In this paper, different legal
Kapoor Governance – An governance codes of systems, institutional
International different countries frameworks, traditions
Perspective such as India, United results in range of different
 12

A Study of Kingdom & United approaches to corporate

Different States of America as governance; developed
Corporate well as code from around the world has been
Governance bodies like OCED and studied. However, common
Codes ICGN. to all good corporate
governance regimes is to
safeguard the interests of
shareholders.
2) 2019 Subhash Indian Company To enumerates This paper critically analyse
Chandra Law On important enactments the new Company Law,
Das Corporate of Indian Companies discusses the changes taken
Governance – Act, 2013 concerning place to the 2013 Act in
A Critical Corporate regard to key topics of
Analysis Governance. governance and makes new
suggestions for further
improvement in the standard
of Corporate Governance.
3) 2018 Meenu Corporate To construct Corporate This study reveals that
Mahesh Governance Governance degree of Corporate
wari Disclosure Disclosure index and Governance Disclosure
Practices In to make comparative Practices is excellent in all
PHARMA And analysis of Corporate sampled companies. All
FMCG Sector Governance Pharma and FMCG Sector
Companies Disclosure Practices companies included in BSE
by using index score SENSEX fulfilled almost
among the sampled mandatory requirements in
companies. all sub-indices prepared as
per SEBI (Listing
Obligations and Disclosure
Requirements) Regulations
2015.Findings also show that
FMCG sector companies
secure more score in
comparison to Pharma sector.
The ITC Ltd. scored the
highest score 96in Corporate
Governance Index.
4) 2018 Meenu Corporate To make comparative Researcher analyze, all IT
Mahesh Governance analysis of Corporate Sector companies included in
wari Practices In Governance BSE SENSEX fulfilled
Indian Corporate Disclosure Practices almost mandatory
IT Sector by using index score requirements in all sub-
Included In BSE among the sampled indices of the SEBI
Sensex: A companies. Regulations 2015. The
Comparative Infosys Ltd. scored the
Study highest score i.e.95 in
Corporate Governance Index.
However, all the companies
are doing excellent corporate
governance practices, but in
order to maintain interest of
stakeholders and for more
transparency in business
operation, SEBI should take
more stringent steps to avoid
 13

any kind of fraud and to fair

trading in the stock market.
5) 2017 S. Literature Review To review the This paper reveals that 66
Sandhya on Corporate literature on Corporate relevant research articles are
and Governance Governance practices. reviewed from the journals
Neha Structure and whose online editions are
Parashar Firms available and doctoral theses.
Performance with The parameters used for
Special Reference searching were Corporate
to Banking Sector Governance index,
governance in banks and
financial variables. The
literature is categorized on
various bases like the country
of study, year of study, type
of research.
6) 2017 Prahlad The Role Of To analyse the In this paper, the global
Sharma Corporate legitimacy of economic and financial crisis
Governance In companies and their is also affecting the MENA
Middle East directors, the region, and threatening its
(Corporate effectiveness of capacity to attain the
Governance And governing bodies, and necessary level of economic
Ethical Issues) their accountability in growth in order to meet the
the society have demands of citizens in search
become crucial and of improved welfare, without
critical issues. destroying natural resources.
Many alternative structures
can work well in the
appropriate context. In fact,
despite all the commentary
on governance structure-
unitary and two-tier board,
the proportion of INEDs, the
separation of chairman and
CEO, board committees and
the rest, the issue of effective
governance is not really
about structure but about
process.
7) 2015 Does Corporate To ascertain the effect From analysis, Researcher
Rachana Governance of corporate found that the sizes of board
Vishwa Increases Firm governance aspects on of directors, Independent
karma Performance of It the performance of directors and board
and Industry? An selected IT companies committees have affect
Alok Empirical in India along with significantly the IT
Kumar analysis their year wise companies. They have been
performance. found no any significant
impact of female board and
board meeting on financial
performance. It is quite
surprising when gender
effect among the board
members did not turn out to
be significant with regard to
financial performance. So,
 14

Composition of boards has

differentiated the financial
performance results.
8) 2012 James Corporate To find out the This paper shows that,
Jacob Governance in relevance of practicing Corporate Governance is
Urban Co- corporate governance different from day to day
operative in urban co-operative management of a bank,
Banks – The New banks. which is the basic
Mantra for responsibility of the
Greater Efficiency operating management i.e. a
and team consisting of the Chief
Customer Executive & top
Satisfaction management functionaries
supported by the operating
staff. Corporate governance
on the other hand, is to create
an environment to help the
operating management to
enhance the stakeholders‘
value.
9) 2011 Jaspreet Corporate To promote good This paper reveals, A
Kaur Governance in corporate governance, successful governing body
India: Issues for strengthening of the needs a cadre of the
Consideration democratic process competent. Respected
and strengthening the leadership is a crucial driving
media to ensure public force. Professionalism, with
awareness, continuous personal
undertaking the development and learning, is
regular policy reviews fundamental. In future,
and effective corporate governing bodies may have
leadership. to be less rigid, less bounded,
and more adaptable. That
might mean board styles are
transient, more flexible, and
certainly less formal. The
original concept of the
corporation was founded on
trust. Directors were
recognized a reliable
stewards of the interests of
others.
10) 2009 Hitesh J Corporate To examine the The study includes four
Shukla Governance and governance practices renowned companies in the
Indian FMCG prevailing in the FMCG sector. It has been
Industry prominent companies observed that among the four
of the Indian Fast renowned FMCG companies,
Moving Consumer ITC scored the highest
Goods (FMCG) sector points, followed by Tata Tea,
within the Indian HUL and Nestle. ITC, Tata
regulatory framework. Tea and HUL figured in the
criteria of Very Good and
Nestle figured in the criteria
of Good.
 15

RESEARCH GAP

Earlier there have been numerous studies conducted on the Corporate Governance but no study

has been conducted on Corporate Governance Disclosure practices in FMCG sector as well as

no study has been conducted on comparative study on Corporate Governance Disclosure

Practices between Large - Cap FMCG Companies and Mid-Cap FMCG Companies. Most of the

studies are based on Disclosure of mandatory requirement of Corporate Governance practices

but very few studies have been conducted on Non-Mandatory requirement of Corporate

Governance Practices and many aspects like- member of audit committee members, non-

executive directors, board meetings are not covered sufficiently under the previous studies.

NEED OF THE STUDY

 In the last decade Corporate Frauds and Governance failure is occurring frequently

which has stolen the trust of investors thus it is require to revive the confidence of

investors. Securities Exchange Board of India is also making continuous efforts to

protect the interest of investors by way of strengthening the corporate governance and

more disclosure of Corporate Governance Practices. So there is a need of Study extent

of disclosure of Corporate Governance Practices in selected companies.

 Significant changes have been made in corporate governance practices by the

amendment of Companies Act 2013. Clause 49 has been revised as per the guidelines of

Companies Act 2013. Therefore, there is a need to study these changes related to

Corporate Governance Disclosure practices as per the revised guidelines of SEBI clause

49. Besides SEBI Clause 49, there is a need to study the other parameters of Corporate

Governance.

 FMCG Sector plays a major role in development of India. Selected companies

generating employment, increasing exports, increasing tax revenues and innovation. So,

there is a need to study the comparative study on corporate Governance disclosure

practices in large-cap and mid-cap selected companies of FMCG sector.

16

OBJECTIVES OF THE STUDY

 To examine the Corporate Governance disclosure practices in selected Large-cap

companies of FMCG sector as per selected guidelines.

 To examine the Corporate Governance disclosure practices in selected Mid-cap

companies of FMCG sector as per selected guidelines.

 To compare the Corporate Governance disclosure practices in selected Large-cap and

Mid-cap companies of FMCG sector as per selected guidelines.

 To study investors perception towards Corporate Governance disclosure practices in

selected Large-cap and Mid-cap companies of FMCG Sector as per selected guidelines.

RESEARCH METHODOLOGY

To accomplish the objectives of the study, the following research methodology will be

followed:

1. Scope of the Study:

It will cover the Corporate Governance Disclosure Practices in selected companies of

FMCG Sector as per selected guidelines i.e. SEBI CLAUSE 49, OECD Guidelines and

Deloitte regulation.

2. Types of Data:

Primary and Secondary data will be used for achieving the different objectives of the study.

3. Data Collection:

 Primary Data- Data will be collected through Questionnaire which will be filled up by

200 investors of selected companies.

 Secondary Data- Data will be collected through Annual Reports of the selected

companies and other sources like- research papers, Journals, Magazines, Periodicals and

Newspapers.

4. Sample Size:
 17

Sample size is 10 FMCG Sector companies, 5 companies are from Large – Cap i.e. Largest

Market Capitalisation and 5 companies are from mid – Cap i.e. Middle Market

Capitalisation of Fast Moving Consumer Goods (FMCG) Sector. These Companies are as

following-

S. No. Large- Cap Companies Mid- Cap Companies

1. Hindustan Unilever Limited (HUL) Colgate Palmolive (India) Limited
2. India Tobacco Company Limited (ITC Emami Limited
Limited)
3. Britannia Industries Limited Avanti Feeds Ltd.
4. NESTLÉ India Bajaj Consumer Care Ltd.
5. Marico Limited Jyothy Laboratories Ltd
6. DABUR India Ltd. Tata Global Breverages Ltd.
7. Godrej Consumer Products Ltd. Future Consumer Ltd.
8. Proctor and Gamble Hygiene and Godfrey Phillips India Ltd.
Healthcare Ltd.
9. GlaxoSmithkline Consumer KRBL LTD.
Healthcare Ltd. (GSK)
10. United Brewerie Zyduswellness Ltd.

5. Sample Selection Criteria:

 Selected Companies are listed in NSE and BSE.

 Selected Companies are top 5 companies in their respective sector on the basis of

Market Capitalisation as on 1 April 2015.

6. Type of Research:

This study is analytical type of research.

7. Duration of the Study:

For the purpose of analysis of data, a period of five financial year from 2015-16 to 2019-20 will

be considered for the study.

8. Data analysis:

To analysis of the data different statistical and presentation tools will be used.

 For the analysis of data descriptive tools like- Mean, Standard Deviation and inferential

statistical tools like- Chi-Square Test, T-test and ANOVA will be used.
 18

 The presentation tools will be bar diagram, pie- chart and graph.

 Check list will be prepared for the study.

HYPOTHESES

Researcher has constructed the following Null Hypotheses (Ho):

 Ho1: There is no significant difference in disclosure practices of Corporate Governance

in selected Large-cap companies of FMCG Sector.

 Ho2: There is no significant difference in disclosure practices of Corporate Governance

in selected Mid-cap companies of FMCG Sector.

 Ho3: There is no significant difference in disclosure practices of Corporate Governance

in selected Large-cap and Mid- cap companies of FMCG sector.

 Ho4: There is no significant awareness exists among investors of selected companies

regarding Corporate Governance disclosure practices.

OBJECTIVE WISE RESEARCH METHODOLOGY

S.NO. OBJECTIVES OBJECTIVE WISE RESEARCH

METHODOLOGY
1. To examine the Corporate To achieve this objective researcher will prepare the
Governance disclosure practices in checklist according to selected guidelines on
selected Large-cap companies of corporate governance disclosure practices in
FMCG sector as per selected selected Large-cap companies and for the analysis
guidelines. researcher will use the mean, S.D., T- Test and
ANOVA.
2. To examine the Corporate To achieve this objective researcher will prepare the
Governance disclosure practices in checklist according to selected guidelines on
selected Mid-cap companies of corporate governance disclosure practices in
FMCG sector as per selected selected Mid-cap companies and for the analysis
guidelines. researcher will use the mean, S.D., T- Test and
ANOVA.
3. To compare the Corporate To achieve this objective researcher will compare
Governance disclosure practices in the disclosure practices of selected Large-cap and
selected Large-cap and Mid-cap Mid-cap companies of FMCG sector on the basis of
companies of FMCG sector as per results of First and Second Objective.
selected guidelines.
4. To study investors perception To achieve this objective Researcher will prepare
towards Corporate Governance Questionnaire to be filled up by the 200 investors
disclosure practices in selected and Questionnaire will be analyzed on the basis of
large-cap and Mid-cap companies Weighted Average Mean and Chi- Square Test.
of FMCG Sector as per selected
guidelines.
 19

PROPOSED CHAPTER PLAN

CHAPTER NO. NAME OF THE CHAPTERS

CHAPTER 1 INTRODUCTION
CHAPTER 2 REVIEW OF LITERATURES
CHAPTER 3 CORPORATE GOVERNANCE DISCLOSURE PRACTICES IN
SELECTED LARGE-CAP AND MID-CAP COMPANIES AS
PER SELECETED GUIDELINES
CHAPTER 4 COMPARATIVE STUDY OF CORPORATE GOVERNANCE
DISCLOSURE PRACTICES IN SELECTED LARGE-CAP AND
MID-CAP COMPANIES AS PER SELECTED GUIDELINES
CHAPTER 5 ANALYSIS OF INVESTORS PERCEPTION
CHAPTER 6 FINDINGS, CONCLUSION AND SUGGESTIONS
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SUBMITTED BY: UNDER THE SUPERVISION OF:

Lakhan Veer Singh Prof. Nidhi Sharma
Research Scholar Supervisor
Department of Accountancy & Law
Faculty of Commerce
Dayalbagh Educational Institute

HEAD
Prof. Pramod Kumar
Department of Accountancy & Law
DEAN
Faculty of Commerce
Dayalbagh Educational Institute
Agra.