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LAW 506 CORPORATE GOVERNANCE L T P C

Version: 1.1 4 0 0 4
Pre-requisites//Exposure Contract, Constitution, Company Law
co-requisites SEBI & Investment Law
Semester IX
B.A.LL.B.(H.) & B.Sc.LL.B.(H.)

Course Description:

Corporate governance is the system of rules, practices and processes by which a company is
directed and controlled. It is the technique to govern the company. Corporate governance
essentially involves balancing the interests of the many stakeholders in a company - these include
its shareholders, management, customers, suppliers, financiers, government and the community
as a whole. Since corporate governance also provides the framework for attaining a company's
objectives, it encompasses practically every sphere of management, from action plans and
internal controls to performance measurement and corporate disclosure. Corporate governance is
very essential to regulate and manage the company efficiently and transparently. Recently, much
importance is given upon corporate governance in the face of series of corporate frauds and
corruption. However, the aim of this paper is to give expert knowledge to the students of LL.M.

Course Objectives

 The main object of this course is to develop among the students an understanding of
the different approaches that various countries have adopted for promoting better
corporate governance and how these countries deal with the existing challenges in the
practice of corporate governance norms.
 Students will be taught the different systems of corporate governance in the United
Kingdom, the United States, Canada, Australia, New Zealand, Germany, Japan and
India.
 To give practical knowledge of corporate governance to the students;
 To impart techniques of transparent, honest and efficient corporate Governance;
 To impart knowledge of Corporate Social Responsibility.

Pedagogy
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The pedagogy of the course will be as below:

 Class Room Discussion
 Teaching Assignment
 Presentations
 Case Studies
 Projects
 Seminar
 Panel Discussion

Evaluation Scheme:

Sl. Components Weightage

No. (Max. Marks)
1 Project Submission 20
2 Project Presentation 10
3 Seminar 10
4. Teaching Assignment 10
5. Semester End Examination 50
6 Total 100

Text Books:
1. Gower and Davies, Principles of Modern Company Law, Sweet and Maxwell.
2. Indrajit Dube, Corporate Governance, Lexis Nexis Butterworths, Wadhwa.
3. Corporate Governance, Principles, policies and practices, A.C. Fernando,
Pearson Education.
4. Corporate Governance, Indian Institute of Corporate Affairs.

Reference Books:
1. Arad Reisberg, Derivative Actions and Corporate Governance, Oxford
University Press.
2. Alan Dignam and Michael Galanis, The Globalization of Corporate
Governance, Ashgate.
3. Stephen M. Bainbridge, The New Corporate Governance in Theory and
Practice, Oxford University Press.
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4. Alan Dignam and Michael Galanis, The Globalization of Corporate

Governance, Ashgate.
5. C. L. Bansal, Corporate Governance – Law Practice & Procedures with
Case Studies, Taxmann Publications.
6. Adrian Cadbury, Corporate Governance and Chairmanship – A Personal
View, Oxford University Press.

Course Contents:

Module I: Introduction to Corporate Governance

 Genesis and historical development of corporate governance.
 Objectives and fundamental principles of corporate governance.
 Corporate Governance vs Corporate Management
 Models of corporate governance – German Model, Japanese Model, the UK – US
Model and the Indian Model.

Module II: The Board of Directors and Board Committees

 The role and importance of the board in corporate system.
 Types of board structure – Unitary board system and the two tier board system.
 Appointment and removal of directors.
 Structure and composition of the board.
 The need for board committees.
 Director compensation.
 The role and functions of the chairman and the CEO.

Module III: Director’s Duty of Care and Board Monitoring: Negligence

and Internal Controls
 Standard of care owed by a director – the English position.
 Negligent decisions.
 Business Judgment rule – the Canadian, American and the Australian approach.
 Delegation and reliance.
 Board monitoring.
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 Independent Directors – merits and demerits of independent directors as a tool for

better corporate governance.

Module IV: Fiduciary Duties of the Director

 Nature of the fiduciary duty of a director.
 Director’s duty to exercise an independent judgment.
 Acting in good faith and in company’s interest.
 Exercising powers for a proper purpose.
 The no-conflict and no-profit rules.
 Remedies for breach of fiduciary duties.

Module V: Self-dealing Transactions and Conflict of Interests

 Duty of directors to disclose interests in transactions.
 Substantial property transactions.
 Loans, quasi-loans and credit transactions.
 Conflict of interest and the use of corporate property, information and opportunity.
 Competing and multiple transactions.
 Executive compensations.

Module VI: Agency Problems and Derivative Actions

 Shareholder litigation and corporate governance.
 Mechanisms to control agency costs.
 Merits and demerits of derivative actions.
 Difficulties with conferring rights on shareholders to litigate.

Module VII: Stakeholders and Corporate Governance

 Primary Stakeholders – investors, employees and creditors.
 Secondary Stakeholders – corporate social responsibility.
 Professionals and corporate governance.
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Module VIII: Corporate Governance regime in India

 Corporate governance initiatives in India.
 Clause 49 of the Model Listing Agreement.
 Other codes and guidelines on corporate governance in India.
 Reforms in the corporate governance regulation regime in India.