Nomination And Remuneration Committees: Balancing Stakeholder Interest And Director Autonomy

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Kashish Sharma, IILM University, Gurugram

ABSTRACT

Nomination and Remuneration Committees (NRCs) play a pivotal role in ensuring transparency, independence, and accountability in corporate governance by overseeing board appointments, performance evaluation, and executive remuneration. In India, NRCs are statutorily mandated under Section 178 of the Companies Act, 2013 and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, reflecting a stakeholder-oriented governance approach. Despite this framework, concerns persist regarding promoter influence, limited disclosures, and a compliance-driven functioning of NRCs.

This paper examines whether NRCs in India effectively balance stakeholder expectations with the autonomy required for sound board decision-making. Using a doctrinal and analytical approach informed by agency and stakeholder theories, the study evaluates statutory provisions, judicial interpretations, and regulatory practices, supplemented by comparative insights from the UK Corporate Governance Code and OECD Principles. The paper argues that strengthening independence, disclosure norms, and performance-linked remuneration mechanisms is essential to enhance NRC effectiveness and long-term governance outcomes.

NOMINATION AND REMUNERATION COMMITTEES- BALANCING STAKEHOLDER INTEREST AND DIRECTOR AUTONO.

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