Academic journal article IUP Journal of Corporate Governance

Stakeholders' Perspective on Electronic Initiatives in Corporate Governance

Academic journal article IUP Journal of Corporate Governance

Stakeholders' Perspective on Electronic Initiatives in Corporate Governance

Article excerpt

(ProQuest: ... denotes formulae omitted.)

Introduction

Good corporate governance is a broader view of corporate governance that focuses on relationship between a company and a broad range of other stakeholders. It is based on the satisfaction of all kinds of stakeholders, CSR and ethics (Sharma, 2011). The urge to decline information asymmetry has accelerated manifold with a view to creating more transparent and robust corporate governance mechanism. Though information and communication technology in e-governance has helped to decline the time taken to send and receive and the kind of information exponentially, still the problem persists. Electronic corporate governance implies utilizing electronic means like Internet, etc. for the purpose of corporate governance. Conducting fair and transparent shareholder meetings, board meetings, conduct of voting for the purpose of decision making, and adequate and timely information to stakeholders are essential part of corporate governance. The Ministry of Corporate Affairs (MCA) introduced 'Green Initiatives' with a view to reducing carbon footprints and thus making the Indian corporate world contribute towards environmental protection.

The underpinnings of the study undertaken by the best practices working group for online shareholder participation in annual meetings (2012) urge towards the diffusion of information to shareholders and stakeholders for corporation to be driven by corporate excellence. On the contrary, there were quite a few findings upholding the detriments for opting completely for electronic mode of execution to facilitate e-governance. The electronic initiatives introduced by MCA related to electronic delivery of documents, virtual shareholder meetings, virtual board meetings, and electronic voting are expected to contribute towards better corporate governance by enhancing the level of shareholder participation, giving an opportunity to board members in being a part of meetings even if they are not present at the location of the meeting, increasing the transparency and accountability, etc. However, the initiatives are not hassle-free and a lot of things need to be taken care of in order to have smooth implementation of electronic initiatives.

As the initiatives have been recently implemented in India, no empirical studies were available in the Indian context and there is a dearth of available literature on this topic. Also, the research available on the topic majorly consists of conceptual articles and those analyzing the existing provisions. The present study analyzes the attitude of shareholders and company secretaries towards various aspects related to electronic shareholder meetings, electronic board meetings, e-voting, e-delivery of documents and the impact of these initiatives on corporate governance. The data and analysis of this study would help in giving a better picture and understanding with reference to the various initiatives adopted by MCA. It would further present a viewpoint of two major stakeholders getting impacted by such initiatives, i.e., the shareholders and company secretaries, which may be helpful for the MCA and corporates in implementing the initiatives smoothly.

Literature Review

The objective of introducing such initiatives worldwide has been to increase the participation level of shareholders, enhancing transparency, and reducing carbon footprints. The electronic initiatives were introduced in India by MCA as 'Green Initiatives' in April, 2011 and have also been included in the Companies Act, 2013. Chandrasekaran (2011) put forward that green initiatives introduced by MCA are beneficial for various stakeholders including society, corporate sector, and shareholders. The author summarized the benefits to various stakeholders.

The implementation of online shareholder meetings in various countries has been analyzed by various authors. Kobler (1998) stated that shareholders must be given an opportunity to participate in order to facilitate corporate democracy. …

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