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| Article Name : | | | CLAUSE 49 AND ITS IMPACT ON PERFORMANCE MEASURES | | Author Name : | | | Paridhi Saini , Shivali Dhameja | | Publisher : | | | Ashok Yakkaldevi | | Article Series No. : | | | GRT-3462 | | Article URL : | |  | Author Profile View PDF In browser | | Abstract : | | | This study attempts to understand the effect of India's adoption of major governance reforms (with reference to Clause 49) which is based on a voluntary 1998 Code of Corporate Governance, developed by the Confederation of Indian Industry (CII, an organization of large Indian public firms).If investors consider the reforms to be valuable (or more valuable for larger firms), firm return in the form of share prices, accounting profit and earning per share should react positively to the key adoption announcement. Over a span period of 10 years before and after the announcement by the Securities Exchange Board of India (SEBI, India's principal securities regulator) for adoption of Clause 49, the profit after tax and EPS of the listed companies specifically the group of companies selected for this study has shown the positive effect on the above specified components. Average returns had increased considerably and even EPS also present the same picture, but these changes may have been due to factors other than the reforms. These results also supported by statistical testing. Overall, we report evidence consistent with investors expecting the Clause 49 reforms to increase the efficiency of corporates. | | Keywords : | | |
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