A change for the better

Tensions from stewardship code will aid corporate governance

The Securities and Exchange Board of India (Sebi) has made a significant and interesting inroad into improving corporate governance by stipulating a stewardship code for the mutual fund industry and alternative investment funds. Ess­entially, a principles-based law (not a prescriptive set of rules), the code takes effect from April 1.

The framework is the first statutory recognition that a space exists for interaction between institutional investors and those involved in corporate governance — a space that has been increasingly shrinking because of fear of insider trading allegations. This is a truthful approach and an important departure from pretending that there is