Governance is the most discussed word nowadays in the corporate scenario, the reasons of which are quite obvious owing to the immense competition and regulatory framework. The concept of multi-national companies and their trans-national operation not only requires strict governance with the domestic laws of the country but also demands assurance of transparent working in the organization.
In India, the need for stronger compliance and ethically upright companies was observed after the rise in the number of scams and frauds in the early 2000s. It was clear that the management can go to any lengths to protect their personal interest. To protect the rights and interest of owners, that is the shareholders, stricter legal regime was required to be introduced and even today, there are various laws and compliances which are introduced regularly which could fit the ever-changing economic and corporate legal landscape of India. One such concept is of “Independent Directors”. The post of independent directors is mandatorily to be filled by certain companies which meet the prescribed threshold, which shall be discussed during the course of this article.
