Shubham Gandhi ​BAL/105/18

Project Topic: ​Critical analysis of the manner of selection of Independent directors of the
Company

Introduction

India has always been known for the rich culture and unity in diversity. The same values and
culture are being expected from the corporate world in the form of Corporate Governance. The
concept had its roots since ancient times when verbal agreements were entered into with the
presence of an independent person. It was rightly provided in the report of Cadbury Committee
that Corporate Governance is the system by which companies are directed and controlled
(Gordon, 2006). Over the period of time, corporate governance in the management of the
Company has gained its importance. Merely managing and administering the affairs of the
Company by the Board of Directors is not sufficient; it must be in an efficient and effective
manner in order to consider the Board of Directors as strategic assets for the Company.
Independent Directors, an indispensable part of the Board, are not only responsible for guiding
the Board for betterment of the Company but also to ensure the interest of the stakeholders and
public at large. The concept of Independent Directors has been discussed since long but it was
first introduced voluntarily as a measure of good governance in the United States (U.S.) in the
1950s before they were mandated by law. Thereafter, owing to sustained efforts by the Delaware
courts and stock exchanges in deferring to decisions of independent boards, independent
directors took on greater prominence.

Objectives

The study focused on the conduct of Independent Directors in India and its impact on the
performance of the board of the company/ companies they are a part of. The research has been
conducted with the following objectives:
1. In the light of Clause 49 of SEBI, to study the composition and extent of independence, the
Independent Directors have in the Board;

2. To examine the circumstances where Independent Directors are not independent; and

3. To critically study the effectiveness of Independent Directors of Satyam Computers

Literature Review

1.​ ​Avtar Singh Company Law 17th Edition

This paper discusses the meaning and role of Independent Directors and all the provisions
regarding it.

Scope and Limitation

The Study is not limited to Indian law and discusses various jurisdiction

Methodology

This research will follow the doctrinal mode of research and will be based on review of various
articles and papers.