Effectiveness and independence of Independent Directors in India: Issues and Challenges

The effectiveness and independence of Independent Directors in raising Corporate Goernance standards and establishing public trust has been an issue of considerable debate. This paper has examined the independence issue of independent directors in India. The Independent directors’ independence from management is assessed through various parameters like appointment and removal procedure, tenure of appointment and the extent of their liability. The aim of this paper was not only to signal what role is expected from an independent director but also an effort has also been made to gain insights about drawbacks in our system and to propose recommendations accordingly. This paper has also provided interesting insights into real life issues and experiences. It is believed that the study would be useful for not only the Independent Directors and potential Independent Directors, but also policy makers, regulators, practitioners, researchers and the investor community at large.