ICAI releases Technical Guide on the provisions of Independent Directors from Corporate Governance perspective
Good Corporate Governance is the manifestation of beliefs, values and actions to ensure maximum value creation to the stakeholders. Value creation is a term broader than wealth creation. The objective of corporate governance is to enhance shareholder value keeping in view the interest of other stakeholders.
Factors like Globalization, Global Competitiveness, Technology, Regulatory Changes and Shareholders Activism etc. have considerably expanded the role and duties of Independent Directors. They are responsible for ensuring better governance by actively involving in various committees set up by a company.
The role of Directors including the independent directors has undergone a significant change consequent to the changes in the economic and regulatory environment. The Companies Act, 2013 (the Act) and the SEBI Regulations are illustrations of legislations affecting the functioning of the Board.
The Independent Directors, being central to the Governance of Companies, play a key role in ensuring that the Companies work in the best interest of the shareholders and other stakeholders. Corporate Board Directors face the challenge of aligning the interests of the Board, management, shareholders and all other stakeholders. They are expected to represent the Company before the stakeholders at large. Therefore, it is necessary for them, especially the Independent Directors, to be aware of their roles and responsibilities in the changing global business environment.
The Institute of Chartered Accountants of India (ICAI) has always endeavoured to promote corporate governance in enterprises by disseminating up to date knowledge and creating awareness amongst its members and stakeholders at large. The purpose of bringing this publication is to enable them to derive a complete idea about the roles which they are expected to perform while serving on the Board so that they discharge their responsibilities effectively and contribute to the Boards especially in the backdrop of changing economic and regulatory scenario.