Publication

Abstract : Over the last three decades, the Government of India (GOI) has undertaken several reform measures to improve the profitability and efficiency performance of state owned enterprises (SOEs) in India. The reform measures undertaken have focused on improving the transparency and accountability of the management of SOEs1 , increasing exposure to competition2 , imposing of hard budget constraint, increasing access to capital markets3 and adopting best practice in corporate governance (CG) among others (Public Enterprise Survey, 2013). The Guidelines for Corporate Governance (2010) was standardized for implementation in all SOEs by GOI in 20104 . Though these guidelines covered all the SOEs under their purview, the SOEs that were listed with the Indian capital markets were expected to comply by the corporate governance regulations of Securities and Exchange Board of India (SEBI) guidelines under Clause 49. The Clause 49 of listing agreement among other norms included the norms relating to definition, role and responsibility of board of directors (Sarkar and Sarkar, 2012). The dead line set for implementing these norms for the listed firms (for both private sector firms and SOEs) were January 2006. It has been seven years since these corporate governance reforms have been implemented in the listed SOEs and private sector firms in India. Scanning the empirical literature we find studies that have analyzed the impact of adherence to these norms on the performance of private sector firms in India5 . To the best of our knowledge, no study in the literature has so far analyzed the impact of these reforms on SOE performance in the Indian context. The present study undertakes to do this. The objective of the present study is to compare the board characteristics in terms of board independence and board size on SOE and privately owned firm performance within a single empirical framework in the context of India.