An empirical investigation of hybrid corporate governance systems in large firms: Evidence from India

The heightened pace of corporate governance reforms has focused attention on country-specific<br />governance models. Considerable debate has ensured as to whether the outsider Anglo-Saxon system<br />or the insider Continental system is most applicable to India. This paper reports the results of a study<br />of Indian governance which used a primary qualitative approach of twelve interviews of key executives<br />of five large firms in 2008 as well as publicly available documents. A literature review establishes six<br />key characteristics that distinguish the two major systems. The governance characteristics of the<br />Indian firms are classified in terms of the two systems with a view to assessing the extent and nature of<br />hybridization. The findings endorse the hybrid corporate governance system of India, clearly<br />identifying similarities and differences to the two major governance models. In drawing on rich<br />interview data, the paper delves into the national characteristics of India that have influenced the<br />hybrid model such as stewardship, corporate social responsibility and partnerships between the<br />corporate and community sectors. The evolution of the governance practices and the rationale for their<br />existence are also examined. The paper demonstrates that the hybrid governance system has emanated<br />from country-specific culture including values and ideologies, and political orientation of socialism.<br />The scope of this study was limited to large listed companies and business groups. Future research<br />should use a larger and more diverse sample including private and unaffiliated firms for outcomes that<br />can be generalized.<br />