L T M/CL J C

LAW4046 CORPORATE GOVERNANCE

4 0 2 0 4
Course objective:
Corporate governance deals with the complex set of relationships between the corporation and its board
of directors, management, shareholders, and other stakeholders. In the recent years, the regulators and
legislators have intensified their focus on how businesses are being run. They are endeavoring to create
a template for new corporate governance and disclosure measures, which is beneficial for both the
stakeholders and controllers. The course will deal with all these new endeavors in depth.
Course Outcome:
At the end of the course the student is expected to have acquired:
1. A basic understanding of the legal framework relating to corporate governance.
2. The skill to identify the major regulatory issues that Indian companies will need to comply
3. Understand implementation of compliance for effective corporate governance.
4. The ability to form an opinion about the important and contemporary developments in the field of
study.
COs: 1,2,3,4
L
Modules Topics CO
Hrs
Introduction to Corporate Governance: Genesis and historical
development of corporate governance - Objectives and
1 8 1,2
fundamental principles of corporate governance - Models of
corporate governance - Theories of Corporate governance.
Agency Problem and Agency Costs: The agency problem and
2 4 1,2
agency costs - Mechanisms to reduce agency costs.
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
3 composition of the board - The need for board committees - The 12 2,3
role and functions of the chairman and the CEO - Executive
compensation and agency costs - Independent Directors: merits
and demerits of independent directors as a tool for reducing
agency costs.
Director’s Duty of Care and Board Monitoring: Negligence
and Internal Controls: Standard of care owed by a director -
4 8 2,3
Negligent decisions - Business Judgment rule - Delegation and
reliance -Board monitoring.
Fiduciary Duties of the Director and Self-dealing
Transactions: Nature of the fiduciary duty of a director -
5 14 2,3
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 - 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.
Agency Problems and Derivative Actions: Shareholder
litigation and corporate governance - Mechanisms to control
6 8 3,4
agency costs - Merits and demerits of derivative actions -
Difficulties with conferring rights on shareholders to litigate.
Stakeholders and Corporate Governance: The shareholder v
stakeholder debate - Role of Institutional Investors in Corporate
7 Governance - Whistleblowing Policy as an element of Corporate 2 3,4
Governance - Corporate Governance Ratings – Scope and
Relevance
Corporate Social Responsibility (CSR) – The concept and
8 2 3,4
rationale – Dimensions of CSR - Environmental Responsibility.
Corporate Governance regime in India – Review: Corporate
governance initiatives in India - Clause 49 of the Model Listing
Agreement - Other codes and guidelines on corporate
9 governance in India - Reforms in the corporate governance 4 3,4
regulation regime in India.
- Impact of the Companies Act 2013 on corporate governance in
India - Reports of the various Committees on Corporate
Governance
Emerging and contemporary issues in Corporate
10 3 1,2,3,4
Governance
Total Lecture Hours 65

# Mode: Flipped Class Room, Case Discussions and Lectures

Text Books
 Avtar Singh, Company Law, 16th Edition, Eastern Book Company, Lucknow, 2016.
 Taxmann, Corporate Governance, Compiled by the Indian Institute of Corporate Affairs, 2015.
References
 Paul Davies and Sarah Worthington (eds), Gower: Principles of Modern Company Law, 10th
edition, Sweet and Maxwell, 2016.
 Arad Reisberg, Derivative Actions and Corporate Governance, Oxford University Press, 2007.
 Indrajit Dube, Corporate Governance, Lexis Nexis Butterworths Wadhwa, 2009.
 Alan Dignam and Michael Galanis, The Globalization of Corporate Governance, Ashgate,
2009.
 Stephen M. Bainbridge, The New Corporate Governance in Theory and Practice, Oxford
University Press, 2008.
  Adrian Cadbury, Corporate Governance and Chairmanship – A Personal View, Oxford
University Press, 2003.
 C. L. Bansal, Corporate Governance – Law Practice & Procedures with Case Studies,
Taxmann Publications, 2006.
Mode of Evaluation :
Theory: class tests, Quizzes/challenging Assignments/Term Paper and FAT
Board of Studies : 30 May 2017
Academic council : 15 June 2017