Title: How has evolution of corporate governance practices of banks in India affected quality of their financial reporting

Authors: Ajit Gupta; Prakash Singh

Addresses: Indian Institute of Management Lucknow, Prabandh Nagar, IIM Road, Lucknow-226013, India ' Indian Institute of Management Lucknow, Prabandh Nagar, IIM Road, Lucknow-226013, India

Abstract: Corporate governance (CG) aims to strike a balance between the interests of a firm's various stakeholders. Financial reporting is another key aspect of firm management. Few studies cover Indian banking firms' CG practices and QFR comprehensively. We aim to quantify the relationship between Indian banks' quality of CG and QFR. Leveraging Sarkar et al. (2012) and Gulati et al. (2020), we created a CG index (CGI) for banks in India. Using Beest et al. (2009), we created a QFR index. We compute these indices for 42 Indian banks and financial firms for four different years between 2010 and 2019. We find that QFR has improved in Indian banks as CG practices have evolved. We recommend making inclusion of CGI and QFR Index mandatory in the annual reports of banks so that the investor community and other stakeholders can use this information in a timely fashion.

Keywords: banking; corporate governance; quality of financial reporting; QFR; disclosures.

DOI: 10.1504/IJICBM.2022.122841

International Journal of Indian Culture and Business Management, 2022 Vol.26 No.1, pp.82 - 119

Received: 17 Feb 2021
Accepted: 08 May 2021
Published online: 13 May 2022 *

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