Corporate governance

The system by which a company is directed and controlled, and in the Indian context principally the question of whether a controlling shareholder treats the minority fairly.

The observable evidence sits in a handful of places. Board composition and the genuine independence of the directors called independent. The record of related-party transactions and how they were approved. Auditor tenure, qualifications and any resignation. Executive pay against performance. And the treatment of minority shareholders in past corporate actions.

The pattern matters more than any single item. Companies that treat minority holders badly tend to do so repeatedly, and the history is in the filings.

Governance is not a soft factor. It decides who receives the cash flow.