The Board Structure, Its Effectiveness And Skepticism: Comparison Between India And Germany

Sinjini Sana & Oindrila Mitra, B.A. LL.B. (Hons.), KIIT School of Law, Bhubaneswar

ABSTRACT

The term “corporate governance” makes reference to the assemblage of rules and regulations, by-laws, policies and also the procedure which ensures the company’s accountability. When these rules, regulations and procedures are correctly followed it establishes a framework and also helps in attaining the objectives of a company. To maintain sound corporate governance, the board of directors must regularly convene or maintain frequent intervals for the board's optimal functioning. Additionally, they should assume responsibilities and undertake measures to safeguard the company against risks and fraud. In this paper we aim to measure the board's impact on corporate governance and how it affects the quality and effectiveness of the board structure and the individuals in it. This paper also highlights the skepticism that takes place in the company or an organization and its importance and relevance. Skepticism refers to doubt as to the truth of something and is an important factor in the company or an organization as it helps them to make better and suitable decisions. This study provides an overview of how corporate governance is compared between the unitary or one-tier board system in India, characterized by a single board structure, and the dual board system in Germany, which comprises two distinct boards.

Keywords: Corporate governance, Professional Skepticism, Board Structure, Unitary system, Two-tier system, Board Effectiveness