THE ROLE OF INDEPENDENT DIRECTOR IN THE CORPORATE GOVERNANCE OF THE COMPANY
By Sakshi Nathani & Pratiksha Gautam
The independent director of a company means any director other than a managing director or whole-time director or a nominee director. The role of independent director is very imminent in the governance of the company’s management and affairs. There exist several benefits that an independent director can bring to a company, the most prominent role is to control the internal processes and mismanagement or fraud which is done by the company. The independent directors act as the trustees of shareholders and help in maintaining the unbiased and objectivity of the decisions taken by the Board. The theory of corporate governance provides a basis on the composition and structure of the Board. The present paper intends to explain the nature, need and importance of independent director in the management of the company, the strategic alliance plans, objective judgment and exercise control over the company. The paper seeks to explain the concept of corporate governance in relation to the Independent director. Corporate governance implies a well-defined, well-structured and well communicated system to manage, direct and control the business of company. The paper also focuses on the composition of BOD and limitation over power of Independent director. The Satyam scandal case is the base root to bring independent director in the spotlight. Lastly, the paper enlists some suggestions, followed by conclusion and some reviews made by the prominent scholars.
Keywords- Independent Director, company, Corporate Governance
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