CRITICAL ANALYSIS ON CLOSING THE GOVERNANCE GAP: ENFORCEMENT DEFICITS, STRUCTURAL VULNERABILITIES, AND THE REFORM IMPERATIVES OF INDIA'S CORPORATE GOVERNANCE ARCHITECTURE

Corporate governance in India occupies a paradoxical position: a statutory and regulatory
architecture that bears close comparison with leading international standards coexists with a
recurring pattern of governance failure that exposes deep structural and enforcement inadequacies.
This article advances a critical, reform-oriented analysis of the Indian corporate governance
framework, focusing on three interconnected structural vulnerabilities: the persistent compromise of
board independence arising from promoter dominance and appointment-capture; the inadequacy
of audit oversight mechanisms as demonstrated by successive corporate frauds; and the systemic
misuse of related-party transactions as instruments of minority shareholder expropriation. Drawing
upon the Companies Act 2013, the SEBI (Listing Obligations and Disclosure Requirements) Regulations
2015, the Insolvency and Bankruptcy Code 2016, and landmark judicial pronouncements of the
Supreme Court, the article situates these vulnerabilities within the theoretical frameworks of agency
theory and stakeholder theory. It identifies the central lacuna in India's governance programme as a
structural enforcement deficit — the failure to translate formally adequate legal norms into
substantive governance outcomes. The article further examines the contribution of judicial decision
making, institutional investor engagement, and recent regulatory developments including SEBI's
revised related-party transaction framework and the Business Responsibility and Sustainability
Reporting regime to governance effectiveness. It concludes with targeted normative
recommendations addressing independent director appointment reform, audit committee
empowerment, related-party transaction governance, and enforcement architecture, arguing that
India's governance trajectory must shift decisively from a compliance orientation towards a culture of
substantive accountability if the aspirations of the corporate governance reform programme are to
be meaningfully realised.
Keywords: Corporate Governance; Companies Act 2013; Board Independence; Related-Party
Transactions; Enforcement; Promoter Dominance; SEBI; Audit Oversight; India.