Open Access Research Article
INDEPENDENCE OF INDEPENDENT DIRECTORS IN INDIA: A CRITICAL ANALYSIS OF LEGAL FRAMEWORK AND CORPORATE ACCOUNTABILITY
Abstract
Independent directors
were placed at the heart of Indian corporate governance to protect the
interests of minority investors while reducing the influence of large owners.
This expectation is still only partially met more than two decades after Clause
49 was enacted and 10 years after the Companies Act of 2013, which provided it
legal basis. This essay analyzes whether Indian law genuinely guaranties
independence or only confirms it. The paper uses a
four-part framework—selection, information, and incentives—to analyze the
Companies Act, SEBI Listing Regulations, committee reports, court decisions,
and secondary literature using a doctrinal approach supported by purposive case
analysis and a selective comparison with the United States and the United
Kingdom liability and exit. The main criticism is that, while India has
established a strong sense of independence, its architecture is inadequate.
Even though the eligibility criteria are stringent, the eligible individual is
nonetheless chosen, notified, reimbursed, and eliminated within a system that
promoters heavily influence. Although important, the liability safe harbor in
section 149(12) of the Companies Act does not eliminate the risk of being
summoned until considerably later in the process. In addition to outlining the
empirical and doctrinal shortcomings that must be addressed, the article
finishes with reform ideas for nomination, information access, procedural safe
harbors, protected exit, and public reporting of board-level effectiveness.
Published Paper
Author Details
Authors: RAYUDU SRI NITHYARegistration ID: 1013566 | Published Paper ID: IJLRA13566Approved ISSN: 2582-6433 | Country: Delhi, India
Article Information
INDEPENDENCE OF INDEPENDENT DIRECTORS IN INDIA: A CRITICAL ANALYSIS OF LEGAL FRAMEWORK AND CORPORATE ACCOUNTABILITY
Authors: RAYUDU SRI NITHYA
- Journal IJLRA
- ISSN 2582-6433
- Volume 3
- Issue 8
About Journal
International Journal for Legal Research and Analysis
- AbbreviationIJLRA
- ISSN2582-6433
- AccessOpen Access
- LicenseCC 4.0
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