Protectors of Corporate Integrity: Assessing the Role of Independent Directors in Light of the 2013 Companies Act
Abstract
Independent directors are fundamental to efficient company governance, provide impartial scrutiny and essential checks and balances on management activities. As neutral consultants, they are responsible for protecting the interests of many stakeholders, including shareholders, workers, and the wider community, while ensuring that organisational actions comply with ethical and legal norms. This paper explores the complex function of independent directors, analysing their legal obligations, the problems they encounter, and their significant influence on organisational openness and accountability. Amidst a period of corporate failures that have diminished public trust, beginning with the IL&FS crisis and extending to Byju's governance controversies, attention has markedly turned to independent directors responsible for corporate oversight. They are regarded as unbiased overseers that will act as a check on financial misrepresentation, promoter control, and executive extravagance. The Companies Act 2013 and the Securities and Exchange Board of India (SEBI) (Listing Obligations and Disclosure Requirements) Regulations 2015 (LODR) provide a robust structure for appointments, duties, and accountability. Nevertheless, their persistent failure to prevent governance deficiencies raises the troubling question: Are independent directors indeed protectors, or are they just ornamental creatures with minimal power? This paper rigorously examines the legal responsibilities of independent directors in India, juxtaposes them with the prevailing circumstances, and assesses whether recent reforms have sufficiently converted these "toothless tigers" into genuine protectors of public interest and shareholders. The article provides proposals that, if implemented, might enhance the ability of independent directors to manage firms successfully. Organisations may enhance openness, accountability, and trust by establishing a conducive atmosphere for independent directors to execute their responsibilities successfully.
Keywords
Corporate Governance, Accountability, Stakeholders, Independent Directors and Ethics.
Citations
IRE Journals:
Yakama Padmavathi, Manish Kumar Attry "Protectors of Corporate Integrity: Assessing the Role of Independent Directors in Light of the 2013 Companies Act" Iconic Research And Engineering Journals Volume 9 Issue 5 2025 Page 1576-1582 https://doi.org/10.64388/IREV9I5-1712208
IEEE:
Yakama Padmavathi, Manish Kumar Attry
"Protectors of Corporate Integrity: Assessing the Role of Independent Directors in Light of the 2013 Companies Act" Iconic Research And Engineering Journals, 9(5) https://doi.org/10.64388/IREV9I5-1712208
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