Shoaib Fazil. S, Tamil Nadu National Law University, Tiruchirappalli, Tamil Nadu, India
ABSTRACT
An Independent Director assists a company in enhancing its company performance and governance practices. They must have the requisite qualifications, experience, and information in areas relating to the company's operations.1 The definition and requirements for becoming an Independent Director are covered in Section 149(6) which states that “An independent director in relation to a company, means a director other than a managing director or a whole-time director or a nominee director....” All Independent Directors have to prove their integrity to the stakeholders of the Company. In English dictionaries, integrity is described as the attribute of being honest and having strong moral values. Section 149 (6)(a) uses the term "integrity" todescribethequalificationofanindependentdirector. Thesameisrelevant under Regulation 16(1)(b) of the Listing Regulation. As a result, an Independent Director is required to respect ethical norms of integrity and credibility. There are significant discrepancies here since the Act has no basis for establishing integrity, leaving space for interpretation. In this research project, the author analyses the standards to determine integrity of independent directors with special emphasis to Clause (a) of Section 149 (b) which deals with the integrity of the directors. The project aims to explain how an Independent Director may show the Board of Directors that he or she is a person of integrity.
Keywords: integrity, independent director, board of directors, corporate governance
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