Scoring more than China, India is at par with Malaysia and Australia ranking 4th across 25 markets globally and is at the 2nd spot in the Europe-Middle East-Asia (EMA) market category, said the study jointly conducted by KPMG and ACCA.
Changes relating to the role and responsibilities of the audit committee, the roles of independent directors, and the codified duties of board of directors as a whole helped India score the leading rank.
A higher ranking in corporate governance (CG) essentially builds more confidence in capital markets as shareholders feel assured about the transparency and the efficacy of top management in the company.
According to KPMG, corporate governance is critical for the Asean region on account of the expectations of high growth rates.
"This reflects the improving standard of corporate governance in India over the years. The results of the study are testimony that these are resonating well with key stakeholders and their perception of the governance standards in India is also improving", said Richard Rekhy, CEO, KPMG India.
Corporate governance requirements in terms of clarity, degree of enforceability and number and type of instruments used by the 25 markets were analysed in the study.
The study found that most markets introduced their CG Codes between 1992 and 2004 and on an average, markets revised their CG Codes 2.4 times.
Also, interestingly, it was noted that 76 percent of the markets had revised their CG Codes after the Global Financial Crisis in 2008; however, markets like Indonesia, South Korea and China didn't revise the same for a considerable time.
"There is also a mindset change in how key players in the governance framework engage with other stakeholders including minority shareholders. These, when implemented, can position India even higher in the ranking," Rekhy added.