Standards for corporate governance often differ in the developing world, but this is one area of life in which the principles of cultural relativism are misplaced.  According to Justice Dilip Raosaheb Deshmukh, who chairs the Company Law Board in New Delhi, solid corporate governance is absolutely essential if businesses are to serve the interests of all stakeholders.

Mr Deshmukh recently inaugurated India's second national conference focusing on corporate compliance.  The conference focus was on the role that independent directors can play in establishing good business practices.  “Good corporate governance provides the basis for sound commercial decision making as integral to successful and sustainable corporate performance.  Although dimensions of conformance are also widening in each country, good governance demands a strong and creative corporate leadership by the Board of Directors,” explained Mr Deshmukh.

According to Mr Deshmukh, many different groups can have an influence over the corporate governance practices followed in India.  He cited not only regulators and other government overseers but also non-governmental organisations, financial institutions and other types of companies.  According to Mr Deshmukh, a stronger framework for corporate governance can have beneficial results that include restoring trust in the business community and building up investor confidence, which is something that is necessary for a thriving stock market. 

Associated Chambers of Commerce and Industry of India chair Preeti Malhotra added that limiting inefficient corporate governance practices is often a matter of increasing the active participation of a well-informed board of directors dedicated to scrupulously following the laws. 

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