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-specificgovernance models. Considerable debate has ensured as to whether the outsider Anglo-Saxon systemor the insider Continental system is most applicable to India. This paper reports the results of a studyof Indian governance which used a primary qualitative approach of twelve interviews of key executivesof five large firms in 2008 as well as publicly available documents. A literature review establishes sixkey characteristics that distinguish the two major systems. The governance characteristics of theIndian firms are classified in terms of the two systems with a view to assessing the extent and nature ofhybridization. The findings endorse the hybrid corporate governance system of India, clearlyidentifying similarities and differences to the two major governance models. In drawing on richinterview data, the paper delves into the national characteristics of India that have influenced thehybrid model such as stewardship, corporate social responsibility and partnerships between thecorporate and community sectors. The evolution of the governance practices and the rationale for theirexistence are also examined. The paper demonstrates that the hybrid governance system has emanatedfrom country-specific culture including values and ideologies, and political orientation of socialism.The scope of this study was limited to large listed companies and business groups. Future researchshould use a larger and more diverse sample including private and unaffiliated firms for outcomes thatcan be generalized.