Corporate Governance Codes in India and the UK: A Comparative Analysis of Compliance and Enforcement Mechanisms.

Abstract

Corporate governance is essential for ensuring transparency, accountability, and proper management of companies. Different countries follow different approaches to corporate governance based on their legal systems and market conditions. This project makes a comparative study of corporate governance codes in India and the United Kingdom, focusing on their compliance and enforcement mechanisms. In India, corporate governance is mainly governed by the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, which prescribe mandatory rules and are strictly enforced by regulatory authorities. On the other hand, the United Kingdom follows a principles-based approach through the UK Corporate Governance Code, which works on the “comply or explain” system, allowing companies flexibility while ensuring transparency through disclosure. This study highlights the differences between the rule-based Indian model and the flexible UK model and examines their effectiveness. The project concludes that both systems have their strengths, and a balanced approach combining strict regulation and flexible principles can lead to better corporate governance.

Keywords