Role of Independent Directors Post Satyam Case

Abstract

Independent directors are seen as accomplices of the board and as outside gatekeepers whose activity is to ensure that administration remains concentrated on conveying shareholder esteem. They are the guard dogs, the one liable for safe guarding the enthusiasm of minority shareholders. A genuine inquiry has been raised on the noteworthiness of such 'independent directors' after Satyam scandal emitted and four independent directors of the organization surrendered. The study aim and examines the effect of Satyam scandal over the job of independent directors in corporate administration. This research is a pure doctrinal research. It includes critical analysis of various reports like Kumar Mangalam Birla Committee’s Report on Corporate Governance, Blue Ribbon Report etc. The research also studies various judgments, articles and statutory provisions such as Clause 49 of Listing Agreement, regarding independent directors. The research instruments, for example, reports and decisions are both valid and dependable. The research uncovers that through different institutions through different legal choices and reports there have been a positive effect on corporate governance versus independent directors. This is a purely doctrinal research. It is limited to judgments passed by courts in India and enactments thereafter. The result of this study will facilitate the corporate institutions and their stakeholders to understand the necessity of corporate governance. It will also help them to understand that how independent directors can be beneficial in providing corporate governance. This study is probably is first to determine the impact of Satyam scandal over the role of independent directors in corporate governance. It offers a beneficial source to those corporate institutions, which are still lagging behind when it comes to corporate governance.

Keywords: Corporate Governance, Independent Directors, Clause 49 of Listing Agreement, Satyam Scandal, Law and Ethics