Open Access Research Article
EFFECTIVENES OF INDEPENDENT DIRECTORS IN PREVENTING CORPORATE MISGOVERNANCE IN INDIA: A CRITICAL LEGAL ANALYSIS
Abstract
The independent directors can be delineated as a vital institution in the area of corporate governance in current times. Their main role is to bring objectivity, oversight and accountability in the decisions taken in boardrooms by striking a balance between the influence of management and promoters as well as protecting the interests of the minority shareholders and other stakeholders. The introduction of the Companies Act of 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations of 2015 indicates that the concept of independent directors has moved from being a regulatory institution to a legal framework in India. Although this complex legal system exists in regard to corporate governance, the efficacy of independent board members is still doubted in the face of continuing issues with corporate governance practices around the world. In the Satyam scandal, even a board consisting of renowned independent individuals failed to sense any wrongdoing. Scandals like IL&FS or ICICI Bank-Videocon raise many problems, such as asymmetry of information, domination by promoters, inadequate oversight of the board, and conflict of interests, to name a few. Current academic literature on the topic points to the essence of distinguishing legal independence from practical independence. The paper evaluates the effectiveness of India's laws and regulations pertaining to independent directors in preventing mismanagement in corporations. For this purpose, it reviews among others the SEBI LODR Rules and provisions of Schedule IV, Sections 149, 166, 177 and 178 of the Companies Act of 2013 along with the recommendations of the Kotak Committee for Corporate Governance and related judicial decisions. Furthermore, it looks into the conflict between independence and excess and establishes the involvement of independent directors in regard to specific corporate governance failures.
Published Paper
Author Details
Authors: SRIYANKA MOHAPATRARegistration ID: 1013490 | Published Paper ID: IJLRA13490Approved ISSN: 2582-6433 | Country: Delhi, IndiaPage No.: 2796-2813
Article Information
EFFECTIVENES OF INDEPENDENT DIRECTORS IN PREVENTING CORPORATE MISGOVERNANCE IN INDIA: A CRITICAL LEGAL ANALYSIS
Authors: SRIYANKA MOHAPATRA
- Journal IJLRA
- ISSN 2582-6433
- Volume 3
- Issue 7
About Journal
International Journal for Legal Research and Analysis
- AbbreviationIJLRA
- ISSN2582-6433
- AccessOpen Access
- LicenseCC 4.0
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