Letter to Editor

I thoroughly enjoyed your previous issue on multi-baggers and the factors to focus on while identifying future potential multi-baggers. I want to know more about corporate governance in India. The Indian stock market is replete with several instances of corporate governance failures. How can an investor spot bad corporate governance early on?
- Jyoti Shah 

Editor Responds: Thank you for writing to us. We are glad you like our observations on multi-baggers. Healthy corporate governance is paramount in any organisation as it cultivates a high degree of integrity and long-term sustainable performance. Some red flags that can help investors recognise bad corporate governance are decreasing promoter holding, high promoter pledging, elevated debtors, substantial related party transactions and fluctuations in audit fees. These are just the data points one needs to observe. One may not be able to predict a corporate governance failure entirely. At times one can feel something is wrong with the company. That feeling comes with years of experience. We hope that we were able to answer your query. Keep writing to us.