Companies Law in India: Steering the directorship

The enactment of the Companies Act 2013 ushered in a new regime of corporate governance and provided flip to the way business is conducted in India. The Companies Law Committee was set up in June 2015, with the mandate to further improve and streamline the Act. Towards this end, the committee engaged in extensive discussions with various stakeholders and undertook a critical examination of established international best practices. Independent directors bring an element of objectivity in the Board and ensure that the interests of all stakeholders are balanced in the best possible manner. A strong presence of independent directors is all the more important in public companies or companies involving significant public interest. Under the Companies Act, at least one-third of the Board of Directors of every listed public company is required to comprise of independent directors.