Corporate Governance in IT Sector: A Comprehensive Study

Abstract

The most important factor in economic growth of an organization and development of economy is
ensuring effective governance. The distinction between ownership and management is what drives the
need for corporate governance. With a strong governance framework in place, resources can be put to use
effectively and efficiently. Thus, corporate governance promotes efficient use of scarce resources and
achieves the dual objective of streamlined process marking and wealth creation. Corporates enable
pooling of resources and putting them to requisite use. These resources pooled by the corporates flow into
those sectors or businesses where there is a well-managed production/ supply of goods & services
wherefrom the return generated is sufficient to meet the needs of the investors. In this day and age,
technology is the driving force of an economy. The pandemic has increased the pace of technology
adoption across the globe as companies and their clients are moving to a digital environment. Even
industries that were traditionally not IT-driven or had little dependence on IT are now adapting their
businesses to the new normal as they too are feeling the need for more agile digital solutions. It is difficult
to exaggerate the importance of information technology in today’s business environment. No matter what
industry a company belongs to, its lifeblood in today’s economy is the information that makes it possible
for it to conduct business. IT services and therefore IT companies are an essential element of any
economy. The IT sector in India has played an important role in allowing India to achieve global
presence. Good governance of the IT sector is therefore crucial since it has far reaching socio-economic
impacts and is a critical element to the preserve growth and development of the economy as a whole. The
purpose of the current study is to evaluate the effectiveness of corporate governance practices in the
Indian IT sector. The paper consists of both aspects, namely, to study relevant literature and to study ideas
from those employed in IT Sector.