By IANS
New Delhi : Although family-run companies continue to dominate business in India, concerns remain over their governance standards, said a survey conducted jointly by Moody’s Investors Service and its India associate ICRA Ltd.
The powerful hold of family-owned businesses in the country can be seen from the fact that out of the 30 companies comprising India’s benchmark market index Sensex, 17 are controlled by prominent business families, the survey noted.
The survey reviewed governance in 32 companies in 16 family-controlled groups that included the Tatas, Birlas and Ambanis. The survey also included companies belonging to Godrej, Vedanta, Wipro, Essar, Bharti, TVS and Muruguppa groups.
These companies have responded quickly to emerging opportunities in the liberalising economy of the country but still face challenges regarding transparency in functioning and choosing successors, the survey pointed out.
The report also noted that despite regulations regarding independent board directors, the families retained significant control over listed companies.
Such governance issues could have negative credit implications, the report said.