We understand that in a company there are certain stakeholder’s such as shareholders, management, customers, suppliers, financiers, employees, government and the community, whose interest is to be protected, directed and controlled by the set system of rules, practices and processes. It talks about the right of the entire stakeholder’s of the company. It is all about balancing individual goals, as well as, economic and social goals.

In today’s market- oriented economy, the Corporate Governance is required to develop added value to the stakeholder’, which is essential for strong and balanced economic development.

In India, 90% of the companies are either unlisted public companies or private limited companies. Most of these are promoter driven company. Control and Management as well as fate of the companies depend on the promoters of the company, whereas they are not only stakeholders of the company. When we analyze Balance Sheet of the Company, which is most effective tools in evaluating financial health at specific point in time, particularly liabilities side, we note certain components excluding shareholder’s fund  is Non- Current Liabilities and Current Liabilities. Who are associated and have impact of these liabilities, definitely stakeholder’s but not the shareholders. How their stake is being taken care of through the Corporate Governance is a question. Most of the Balance Sheet of Indian Company will show that the shareholder’s fund on the liabilities side is even less than half from the other liabilities (i.e. Non-Current Liabilities + Current Liabilities).

These other stakeholders are financiers, customers, suppliers, employees, government and the community which are ignored completely.

Note: However it is presented in one column but here it has been separated in two boxes for having better understanding of the contribution – stakeholders other than shareholders.

Equity and Liabilities

Shareholder’s FUND


Equity Share Capital

Other equity

Equity Components of compound financial statements

Reserve and surplus

Other Reserves

Non- Controlling Interests

Total Equity




I. Non – Current liabilities

Financial Liabilities

1. Borrowings

2.Other Financial Liabilities


Employee benefit obligations

Deferred tax liabilities

Government grants

Other non-current liabilities

Total Non-Current Liabilities

II. Current Liabilities

Financial Liabilities

1. Borrowings

2. Trade Payables

3. Other financial liabilities


Employee benefit obligations

Government Grants

Current Tax liabilities

Other current liabilities

Liabilities directly associated with assets classified as held for sale.

Total Current Liabilities.

The Companies Act, 2013 has introduced various key provisions to ensure good governance in alignment with the globalized corporate world. Like Independent Director, Audit Committee, Nomination and Remuneration Committee, Women Director, Internal Audit, establishment of SFIO (Serous Fraud Investigation offence), CSR (Corporate Social Responsibility) Committee and policy.

Further the Insolvency and Bankruptcy code, establishment of NCLT are the pioneer changes, which should be admired but these are postmortem exercise.

There is scope of continuous improvement to strengthen the corporate governance structure for unlisted companies as well. It should be implemented in true spirit and practical changes should reflect in the business world.

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