The ignored tool of corporate governance rating: An overview of the corporate world in the emerging market

Journal of Governance and Regulation

article

Ayyagari Lakshmana Rao¹  Nikhil Kulshrestha²  Gopalarathinam Ramakrishnan³  Prakash Chandra Bahuguna⁴ 

[1] Department of Commerce, School of Entrepreneurship and Management Studies, SRM University;Doon Business School;Homeroom Eagles;School of Management, University of Petroleum and Energy Studies

关键词: Corporate Governance;    Stakeholders;    Benchmarking;    Metrics;    Rating;   

DOI  :  10.22495/jgrv11i1art4

学科分类：社会科学、人文和艺术（综合）

来源: Virtus Interpress

【 摘 要 】

Generally, the interest of stakeholders is to see the growth of their entities, also they benchmark their entities through business performance metrics or tools like return on equity, return on assets (Mishra & Kapil, 2018), earnings per share, gross profit margin, employee productivity, sales turnover, ratings given by prominent credit rating agencies, such as Investment Information and Credit Rating Agency (ICRA), Credit Rating Information Services of India Limited (CRISIL), Standard and Poor, etc. In addition to this, internal governance mechanisms, board of directors’ characteristics, their independence, transparency, concentration, and presence of employees in the ownership structure also influence financial and stock market performance (Braendle, Stiglbauer, Ababneh, & Dedousis, 2020). However, assessing the performance of entities through some of these limited angles is not always possible. One more criterion for assessing the performance of entities is corporate governance rating (CGR). However, it is not widely used as a tool to assess a firm’s performance in emerging markets. The present research paper is intended to address the scenario of corporate governance rating in Indian corporate world to assess a firm’s performance. With the help of majorly secondary sources of data, this study was conducted from 2003 to 2021 based on the CRISIL’s rating pattern. The results revealed that only 20 companies adopted the process of corporate governance rating. The findings showed the significance of corporate governance rating, its adoption and future research in the development of the rating mechanisms in India as well as in other emerging markets.

【 授权许可】

CC BY-NC