What is it about?
In India, the corporate landscape is dotted with family businesses and government through public sector undertakings (PSU). It is the feature with family business and PSU to have board leadership and head of management position with the same person in a majority of cases. The purpose of this paper is to study the impact of board leadership in terms of chairman-CEO duality and chairman-CEO separation on executive compensation in Nifty 50 index companies.
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Why is it important?
With increased financial globalization time has come for Indian business houses to follow international best practices relating to board leadership structure we therefore, recommend separation of chairman board of director and CEO position. Thence, accountability to the investor community; division and sharing of responsibilities; balance of power and authority and strong board supervision on CEO. Having an effective board and board leadership is the dream of every shareholder, which can best be fulfilled by separating the position of chairman of the board and CEO of the company. It is therefore, time for regulatory enforcement of separation of position of chairman and CEO for all listed companies in India for better corporate governance.
Perspectives
CEO’s need to give the vital setting that drives pay rationality. There is a conflict of interest when executives partake in setting their own particular pay and that no one ought to be engaged with choosing his or her own particular compensation.
Dr. Sahil Singh Jasrotia
International Management Institute
Read the Original
This page is a summary of: Board leadership and executive compensation: corporate governance in India, International Journal of Indian Culture and Business Management, January 2020, Inderscience Publishers,
DOI: 10.1504/ijicbm.2020.105551.
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