An Analysis On The Role Of Independent Directors Under The Companies Act, 2013
- IJLLR Journal
- Apr 8
- 1 min read
Godhawari P, Assistant Professor, School of Law, Vistas, Chennai
Sandhya C, LLB, School of Law, Vistas, Chennai.
ABSTRACT
Under the Indian Companies Act, 2013, directors play a crucial role in the management and governance of companies. The Act lays down provisions that define the powers, duties, and responsibilities of directors to ensure that they act in the best interest of the company and its stakeholders. An Independent Director is a director who is not involved in the day-to-day management of the company and does not have any material or pecuniary relationship with the company, its promoters, or its subsidiaries. The purpose of appointing independent directors is to ensure that the company operates with fairness, transparency, and accountability, and to provide an impartial and unbiased perspective in board decisions. Independent Directors are crucial in protecting shareholder interests, overseeing executive decisions, and ensuring accurate financial reporting, thereby preventing corporate fraud and promoting ethical management practices. However, concerns regarding their independence, efficacy, and influence persist in India. This article examines the role, responsibilities, and challenges of Independent Directors (IDs) under the Companies Act, 2013, with a focus on their contribution to corporate governance, transparency, and accountability in India.
