World economy and international economic relations

Analysis of the relationship between the ethical behaviour of board and corporate governance in the case of India

Economic Annals-XXI

Economic Annals-ХХI: Volume 185, Issue 9-10, Pages: 39-47

Citation information:
Karacsony, P. (2020). Analysis of the relationship between the ethical behaviour of board and corporate governance in the case of India. Economic Annals-XXI, 185(9-10), 39-47. doi: https://doi.org/10.21003/ea.V185-04

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Peter Karacsony
PhD (Economics),
Associate Professor,
Faculty of Economics and Informatics,
J. Selye University
3322 Bratislavska cesta Str., Komarno, 94501, Slovak Republic
karacsonyp@ujs.sk
ORCID ID: https://orcid.org/0000-0001-7559-0488

Analysis of the relationship between the ethical behaviour of board and corporate governance in the case of India

Abstract. Corporate governance has emerged as a very significant tool in business life. Across the world, it is a buzz topic, everybody who has anything to do with the corporate sector talks about corporate governance. In the last decades, the aftermath of corporate scandals and scams leading to the collapse of corporate entities showed need for good corporate governance in India, too. Today, Indian companies are finding new space in global markets for business growth, their interaction with the financial markets and investing community witnessed a significant surge, which ultimately demands effective corporate governance practices. Corporate governance is holding the balance between economic and social goals as well as between individual and community goals.

The overall purpose of the study is to provide an overview of corporate governance in India and show how important the leader’s ethical behaviour in corporate governance is. I hypothesized that the ethical behaviour of the board of directors has a significant impact on corporate governance. For the research, I obtained data from the World Economic Forum Competitiveness Report for 38 Asian countries, focusing on India. The methodology I used to analyze data was regression analysis.

The results reveal that the ethical behaviour of the board has significant positive effects on corporate governance. An ethical leadership should be employed at Indian companies to mainstream corporate governance to achieve high organizational performance.

Keywords: Business; Corporate Governance; Ethical Behaviour; India; Social Responsibility; Investor Protection; Management; Business Ethics; Stakeholders; Competitiveness

JEL Classification: G34; G38; M14; O16

Acknowledgements and Funding: The publication of this paper was funded by the Pallas Athéné Foundations.

Contribution: The author contributed personally to this work.

DOI: https://doi.org/10.21003/ea.V185-04

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Received 2.08.2020
Received in revised form 20.10.2020
Accepted 26.10.2020
Available online 21.11.2020
Updated version of the paper as of 27.12.2020

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