Every time a major crisis happens, governance emerges as the significant risk — whether it is the current pandemic or the various financial meltdowns, governance in general, and corporate governance in particular becomes a focus area. Bank failures, debt recasts, bailouts and write-offs, and bankruptcies follow just as we are seeing now and we will see more soon.
Investor confidence in companies will soon evaporate although the current stock market rise is probably the irrational exuberance in India, given the other options for investments such as real estate markets and hawala markets are in tatters.
In many parts of the world, demands are being raised on CEO pay capping as a ratio of average employee pay. Scandals of the past might emerge to haunt more companies on the brink of shutdowns. And many promoters are actually stashing up funds and waiting for a clean shave from government-owned banks through IBC provisions….