An Analytical Study Relating to the Role of an Independent Director in the Globalised Era: A Detailed Study

Abstract

Corporate governance in India has come mainly in the wake of economic liberalization deregulation of industry and business as also the demand for a new corporate ethics and stricter compliance with the legislation. The new economic policies adopted by the Government of India since 1991 has necessitated the demand for introduction and implementation of a proper corporate governance policy in management of companies not only the interests of their stake holders but also for the overall development of the country. Honesty, ethics, transparency, trust integrity, openness performance orientation, responsibility and accountability, mutual response and commitment to the organizations are the key elements of good corporate governance. Corporate governance mechanism may be classified as external and internal mechanism. Generally internal mechanism is decided by the company's decision makers these consist of Board membership and characteristics such as size of the Board, number of outside Independent Directors and other committees. In Corporate Governance implementation of the independent director will help improve structure of corporate governance, interests of all stock holders and protect rights and interests of small and medium size of investors. To take a fair decision by the Board which is it possible through Independent Directors only? This paper gives a bird eye-view and is an attempt to study and analyze the position, role, function, duties, liabilities, and limitation etc of Independent Director as contemplated under the companies Act, 2013.