Appointment of Independent Directors in India: A Critique

Abstract

The mode of appointment of independent directors has gained traction in recent years and has recently been in the limelight since the Securities Exchange Board of India (SEBI), (the regulatory body for listed securities in India) proposed reforms for the process of appointment/removal of independent directors. This article has explored the accountability cast on independent directors and safeguards provided to them within the ambit of the Companies Act, 2013, along with the concerns and recourses available to minority shareholders from proceeding against the independent directors. The article has attempted to resolve the fallacies in the current modus of appointment of independent directors and has examined alternate modes of appointment, including the feasibility of adopting the dual voting structure followed in the United Kingdom which was proposed in the SEBI reforms. Independent directors, appointment, dual voting structure, the United Kingdom, Securities Exchange Board of India Consultation Paper, Companies Act, 2013, cumulative voting and minority shareholders.