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.
This story is from the July 19, 2021 edition of India Legal.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the July 19, 2021 edition of India Legal.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
PIL, Difficult To Swallow?
In a recent ruling, the Bombay High Court lamented the increasing number of frivolous public interest litigations being filed in courts and echoed the sentiments of the Supreme Court that such litigations are the bane of the judicial system. Is there any way to restrict their misuse?
Till Infertility Do Us Part...
The Calcutta High Court slammed a husband for initiating divorce proceedings due to his wife's infertility and asked him to be a pillar of support for her. Courts have often taken an empathetic view in such matters
IS THAT LEGAL?
Ignorance of law is no excuse. Here are answers to frequently asked queries regarding matters that affect us on a day-to-day basis
The Big Lie
In America, The Big Lie is an idiom used by Donald Trump's opponents and the media to describe his constant gripe about election fraud. Now, it seems more suited to another Republican, Congressman George Santos (right), who has been facing growing calls to resign after he admitted fabricating parts of his resume and biography since his election in New York last year.
Flying into the Sunset
Over 50 years since the first and original jumbo jet, the Boeing 747, took to the skies and revolutionized air travel, the last of the legendary aircraft (right) was delivered to a freight charter company, bringing down the curtain on one of aviation's most successful products.
Star Crossed
Actor and producer Alec Baldwin is a Hollywood legend, having starred in a range of movies, award winning TV sitcoms, and theatre. He was most recently seen in Mission Impossible Fallout, which is an apt description of his current situation.
Walkouts in the UK
An estimated half a million workers have gone on strike, shutting down thousands of schools, public transport and border disruption. It is the biggest day of industrial action for more than a decade.
Myanmar's Misery
Two years after the military coup ousted the elected government led by Aung San Suu Kyi, the brutal crackdown by the junta on so-called \"insurgents\" and civilian protesters has reached a new level with the use of air strikes, a new and deadly tactic in the ongoing civil war.
AMERICA'S ANGST
From messy, divisive politics to a series of mass shootings, and now black officers brutally beating another black man to death as seen in bodycam videos, America's domestic convulsions are cause for serious introspection
JUSTICE LEAGUE
There are few judicial appointment procedures in the world that are completely bereft of the overarching presence of either the executive or the legislature, or both. In the end, the judge is left with all the powers vested in him/her by the constitution to uphold the rule of law, within an atmosphere of external influences
