Independent directors will not be hauled up for the acts undertaken by companies without their consent or knowledge, as per the new norms announced by the government. “We have directed the Registrar of Companies (RoC) not to take any penal action against those independent directors who are not actively involved in the decision making process of the company,” Corporate Affairs Secretary D K Mittal told PTI.
Under the new norms, no action can be taken against independent directors and nominee directors for acts of companies undertaken without their “consent or connivance or where he has acted diligently in the Board process.”
Welcoming the decision, Diljeet Titus, senior partner of Titus & Co said, “the decision would insulate independent directors from unnecessary liabilities and would function as effective watchdog without fear or favour”.
Independent are always welcome in a public limited company. But the role played by them till date is very dismal. There are consistent allegations they get pocketed by private managements. LET THERE BE OBJECTIVE AND EFFICIENT; BESIDES BEING IMPARTIAL, CONTRIBUTIONS BY THEM. Once this happens the objectives can be achieved.