M Damodaran, former SEBI chief said that the corporate governance is not something that resides only in the confines of a boardroom.
“Let me share something with you there is a complete mismatch between the ownership structure of corporate entities in India and the corporate governance prescriptive regime in India,” said Damodaran.
“Our shareholding pattern in India is different from the shareholding pattern in the United States but what we have done with clause 49 initially and now it has become regulation. What we have done is to take Sarbanes–Oxley (Sarbanes–Oxley Act of 2002), most of it and then try and push it through clause 49. There is disconnect between our ownership structure and the US ownership structure,” he added.
There is need for effective communication and companies must incentivise effective communication, he said.