Corporate Governance and the Role and Responsibility of Board of Directors in India with Special Focus on Independent Directors

22 Pages Posted: 7 Jan 2015

See all articles by G. S. Popli

G. S. Popli

Delhi School of Business

Rupina Popli

Delhi School of Business

Date Written: January 5, 2015

Abstract

With the fiasco of Satyam and Sahara in India and the Enron, Worldcom, Permalet, the multinational newspaper group Hollinger Inc. Newyork Stock Exchange and many more debacles in the world, there is a need to pay more attention on the quality of corporate governance. The role and responsibilities of Board of Directors has emerged as an important issue in examining the causes of collapses. This has created much debate on what actually is the role of directors in directing and managing their companies. Though Cadbury Committee on Corporate Governance submitted their report in December 1992 but nothing significant as far as concepts, regulations and their implementations are concerned has changed despite of globalization of businesses and increase in public participation in stock markets. This is the right time to review the role of board of directors and to overhaul the corporate governance in the country.

This paper makes a modest attempt to examine the role of boards of directors in light of institutional contingencies and recent best practice governance, guidelines and regulations such as the United Kingdom Higgs Review and the United States Sarbanes-Oxlay Act 2002. Special attention has been paid to discuss the role and responsibility of independent directors and implications for corporate governance innovation. It concludes by posing questions about recent corporate governance transformations and providing suggestions on appropriate roles and responsibilities that should be enshrined to independent directors. In addition to this, a mechanism of how independent directors should be selected has been suggested.

Keywords: Corporate Governance, Independent Directors, Regulations, Fiasco, Collapses, Transformation, Corporate Governance Innovation

Suggested Citation

Popli, Gurmukh Singh and Popli, Rupina, Corporate Governance and the Role and Responsibility of Board of Directors in India with Special Focus on Independent Directors (January 5, 2015). Available at SSRN: https://ssrn.com/abstract=2545715 or http://dx.doi.org/10.2139/ssrn.2545715

Gurmukh Singh Popli (Contact Author)

Delhi School of Business ( email )

VIPS - Technical Campus
AU Block, Outer Ring Road
Delhi, 110034
India

Rupina Popli

Delhi School of Business ( email )

VIPS - Technical Campus
AU Block, Outer Ring Road
Delhi, 110034
India

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