Scope Of Independent Directors In India Through The Lens Of Corporate Governance
- IJLLR Journal
- Jan 21, 2025
- 1 min read
Aditya Soni, O.P. Jindal University
ABSTRACT
According to the legal standards established by the Companies Act of 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations of 2015, independent directors in India are supposed to exercise autonomy and independent judgement in corporate governance. An outline of the idea of independence for independent directors in the country is given in this abstract. The abstract outlines the requirements for independent board members in India, such as the lack of a major financial connection, a close family connection to the firm's promoters or administration, and not working for the company or being related to its workers. It emphasises the need of independent directors in maintaining objectivity, openness, and the defence of the rights of minority shareholders. The regulatory structure supporting independent directors' autonomy is further examined in the abstract, involving reporting of conflict of interest, tenure, and compensation as well as performance evaluation. It also covers the independent directors' legal obligations and duties, placing emphasis on the necessity of acting honestly and with proper care. The difficulties and arguments surrounding independent directors' autonomy are examined, along with worries about conflict of interest, a lack of knowledge, and management or promoter influence. It is also mentioned that regulatory procedures are effective and that independent directors need to be more independent and effective. The abstract ends by summarising the significance of independent directors for guaranteeing sound corporate governance and safeguarding the interests of stakeholders, while highlighting the need for continual assessment and enhancement of laws and regulations to increase their degree of independence in the nation's corporate landscape.
