ANY new rule designed at making capital markets well-organised and reinforcing governance should be greeted. In an attempt to enrich corporate governance and make independent directors of listed companies powerful, the capital market watchdog the Securities and Exchange Board of India (SEBI) has revamped regulations pertaining to their appointment, remuneration and removal, targeted at giving more voice to shareholders while sinking the influence of promoters. The changes are intended to be in place from January 1, 2022.
According to the sources, there are 5,553 individuals holding 7,122 independent directorships in companies listed on the National Stock Exchange (NSE) and there are 1,248 women holding 1,680 independent director titles.
Independent directors are meant to perform a pivotal role in maintaining corporate governance benchmarks in any company. For decades now, both SEBI and the department of corporate affairs have slogged to improve the role of independent directors and the Kotak Committee had noted that they shape the spine of the corporate governance outline worldwide as also in India.
Apart from the auditors, who are supposed to keep a tight watch on financial transactions, making sure that they are lawful, it is the independent directors who need to maintain tabs on the going-ons within a company to confirm everything is above board. However, in actuality, this is next to impossible, given that promoters hold an average of 50 percent of the equity in the top NSE 500 companies. Not shockingly, these promoters run the businesses as their fiefdoms and it is difficult for independent directors to blow the whistle. Though institutional shareholders are capable of getting wind of any hostile affair, minority shareholders are generally left clueless or ignorant.
Denne historien er fra July 19, 2021-utgaven av India Legal.
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Denne historien er fra July 19, 2021-utgaven av India Legal.
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