The Bombay Stock Exchange (BSE) and the International Finance Corporation (IFC) will be developing a new corporate governance scorecard that will enable companies to assess their corporate governance performances against global benchmarks, the BSE said in a statement on Thursday.
The scorecard will encourage implementation of standards by tracking reforms and will be available for stakeholders ranging from regulators and promoters to investors.
"The collaboration with IFC to develop the scorecard is a revolutionary step towards benchmarking companies in India. The scorecard will result in increased transparency and boost investor confidence," said Ashishkumar Chauhan, MD & CEO, BSE.
Companies would be able to identify areas of improvement, monitor progress, strengthen decision-making and manage risks efficiently, the statement said.
On its part, IFC, the private sector lending arm of the World Bank, would develop a scoreboard tailored to India's needs.
"IFC is involved in strengthening corporate governance worldwide and developing an India-specific scorecard is a step in the right direction. It will result in greater transparency among companies, enhancing investor confidence, access to capital, economic development, and growth," the statement quoted Darrin R. Hartzler, IFC's Global Manager for Corporate Governance, as saying.
IFC's committed portfolio in India stood at $4.7 billion as of 30 June, 2014, making India IFC's largest portfolio exposure.
The BSE is Asia's oldest stock exchange.
