Successive reforms have placed great responsibilities on the institution of independent directors
In law and theory company directors are stewards of the interests of all shareholders. To help inculcate and protect the spirit of independence of independent directors in practice was rightly positioned at the top of the Securities and Exchange Board of India’s (Sebi’s) mandate to the Uday Kotak Committee on Corporate Governance. It is on this fundamental matter that the committee’s recommendations would have had profound positive impact with consequences for making more robust the future growth of corporate India and arguably the broader economy. While the committee has made several praiseworthy and purposeful recommendations in areas of audit, related-party transactions, skills and strategy and responsibilities for independent directors, it has side-stepped this golden opportunity to materially strengthen the institution of independent directors.