Programme

PGPX

Term

V

Academic Year

2021-22

Course title

Corporate Governance

Area

Strategy

Credits

0.75

Instructor(s)

Prof. Anish Sugathan, Prof. Naman Desai

Course Description & Objectives

Introduction: The corporate format of business organization with its distinctive feature of limited liability has evolved over the last two centuries. While the format fostered innovation and risk taking on an unprecedented scale, it also led to concentration of economic power in the hands of a few - corporate boards and top executives. Originating from concerns about the possibility of misuse of the immense power corporates enjoy, Corporate Governance is focused on ensuring that the processes adopted by corporations for creation of wealth for their owners (shareholders) are with due regard to their impact on the larger society. This course provides insights into tenets of good governance and how systems may be designed to ensure good governance. Objectives: This course will prepare you to deal confidently with the variety of issues directors of companies face in the demanding business environment of today. The course will enhance your competency by apprising you of the concepts and frameworks from governance, ethics and decision making. The interactive pedagogy, with presentations and role plays, will sharpen your skills in using the knowledge acquired in practice. The discussions in the course will essentially revolve around the following two themes:  Functioning of Boards – constitution and charter of boards; constitution and charter of board committees; role of boards in strategy formulation and execution, performance evaluation of management, determining compensation to top management, ensuring compliance with regulations and laws, ensuring ethical functioning of the company, risk management, transparent reporting and clear communication, and ensuring good corporate citizenship. Functioning of Directors – role of the chairman; role of non-executive independent directors; role of non-executive nominee/institutional directors; role of the executive/whole-time directors; dealing with conflict of interest; contributing to board deliberations; coping with challenges to independent functioning; challenging executive management to improve organization functioning; setting the agenda for innovation and change.  The specific objectives of the course would include (but not limited to) the following:  Understand and explore relationships between and among the corporation, the state and the society in carrying on business for the benefit of shareholders and otherstakeholders. Understand the relationships between and among shareholders and other stakeholders, boards and executive management.  Develop an appreciation of the legal and financial requirements of corporate governance in India and international best practices.  Develop ability to critically evaluate the processes required to effectively manage board matters in private and public sector corporations, with dominant and dispersed ownership. Develop understanding of the importance of corporate reputation based on business ethics, social responsibility, corporate citizenship, integrity and transparency as building blocks.

Pedagogy

Sessions will be largely case based. The class will be grouped into 10 teams. In each session (after the first) one randomly chosen team will be asked to make a short presentation on the case scheduled and another randomly chosen team will be asked to critique the presentation. A few presentations and critique are kept aside to give a second chance to a group that does not do well in its first chance or to give another chance to a group that volunteers to present/critique. The grade for the group class participation will be based on the quality of presentation and critique. The teams will be expected to work together in syndicate sessions and analyse the prescribed cases pre-class, in preparation for discussion and presentation in the class. Each Group will identify two or three key issues arising from the case (scheduled for the session) with reasons for their choice and prepare a short note (maximum length: one page) suggesting how the governance issues identified may have been dealt with better. The short note should be submitted to the TA (Teaching Assistant) before the class session.  The presentation time would be about fifteen minutes. If a power point presentation has been prepared by the group, the number of slides used shall not be more than five to six. The presentation should focus on the issues and possible action in the situation based on principles derived from theory and corporate best practices. Following the presentation/critique of the case/presentation, the instructor will open the discussion on the case to the entire class. Participants would be encouraged to draw on their organizational and larger experience to contribute to class discussion. New perspectives brought into discussion will be given much higher weight compared to parroting points already made in the class.