CHALLENGES TO EFFICIENT WORKING OF INDEPENDENT DIRECTORS

Abstract

Independent directors are appointed in a company to supervise the executive board of the company. Institution of independent directors play a crucial role in ensuring the director’s accountability for their actions, independent directors are appointed on the board of the company in the capacity of trustees of shareholders who would protect their interests in the company. However, there are issues persisting with their actual independence in the company. There have been plethora of scams both in India and in other jurisdictions where the role of independent directors could have prevented them from happening had the independent directors been vigilant and performed their functions as per the standards. Hence, it has been argued that there are various issues subsisting within the institution of independent directors, this paper is an attempt to indentify the issues plaguing them and hampering their effective functioning and it also attempts to provide a framework to counter the issues so identified.