Published Paper Details:

A sound banking system is a fundamental prerequisite for the functioning of an economy. The Indian banking sector is developing rapidly and at the same time, it is also exposed to several obstacles. Recent frauds have proven that bank is exposed to several dangers such as embezzlement, failure to disclose the facts, falsification or fabrication of accounting records, corruption, etc. which has weakened the credibility of the financial system and posed a big challenge for the entire banking system. The world witnessed a lot of corporate fraud caused by CEOs and other top-level management authorities. After the Satyam Computers Ltd fraud case, several questions were raised on market integrity and the credibility of the management authorities. This incident made regulatory authorities implement corporate governance policy in the organization to prevent such kinds of fraud in the future. The role of corporate governance emerged to bring transparency and accountability in the working of audit committees and the duties of management authorities of the organization. Its mechanism is to monitor the activities of the organization and control the corporate actions. Monitoring and controlling of business organization should be done by shareholders of the organization. Shareholders possess a substantial interest and a great power in the decision-making, being owners of the organization, it is their responsibility to keep an eye on the functioning of the management of the company. The concept of active participation of shareholders in management decisions, monitoring their activities, and raising questions against the act of management executives whenever necessary, to bring desired change in the organization is known as 'Shareholder Activism'. If corporate governance is the legislative framework to ensure transparency and accountability of the management authorities, shareholder activism is the execution of this framework by active shareholders. To promote the practice of shareholder activism several regulatory authorities have supported it with laws such as the Companies Act 2013 and provisions of SEBI. Despite these laws, the practice of shareholder activism seems to be less. One such absence of shareholder activism can be noticed in the Punjab National Bank case.