RESEARCH PAPER ON ROLE OF INDEPENDENT DIRECTORS

AUTHOR – NAIVEDHYA KUMAR, STUDENT AT SCHOOL OF LAW, NARSEE MONJEE INSTITUTE OF MANAGEMENT STUDIES, DEEMED TO BE A UNIVERSITY, MUMBAI, (INDORE CAMPUS)

BEST CITATION – NAIVEDHYA KUMAR, RESEARCH PAPER ON ROLE OF INDEPENDENT DIRECTORS, LAW AND SOCIAL POLICY REVIEW, 1 (1) of 2023, Pg. 148-152, APIS – 3920-0015 | ISSN – 2583-8180

ABSTRACT

The Companies Act, 2013 requires that at least one-third of the directors of any publicly traded business be “Independent Directors,” defined as directors who are not employees of the firm. Independent directors’ part in Corporate Governance has been under the microscope as of late. Some believe that the boardroom environment has improved after the introduction of Independent Directors. Others have argued that it serves as a useful deterrent against fraud and poor management. Because they are not selected by any one shareholder, Independent Directors have an undivided responsibility to the firm as a whole.^[1] Theoretically, the Independent directors have no vested interests in the firm and may thus vote and participate in other corporate matters independently. The majority of shareholders, however, have the power to vote out the Independent director. Independent directors’ ability to protest to policies that favour one party solely can be utilised to safeguard the interests of minority shareholders.

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[1] “ Avtar Singh, Company Law, Eastern Book Company, 2016