Pratham KaushikAIR 5 · CSE 2017 · 160 wordsTheir whole copy
Opening · a definition
Corporate Governance is doing business to maximise shareholder interest with fairness to society as a whole. A company is governed through a Board of Directors, appointed by shareholders, who in turn appoint the management.
Body · continuous prose
Independent directors are those without any stake in the company and whose priority is to ensure the company mgmt is fair and ethical in its practices.
Independent directors see to it that the company is run with proper rules and regulations and follows the correct approach of corporate governance. The concept of independent directors rely on the fact, that they do not have any interest in the profit maximisation of the company, thus will be neutral while managing its affairs and will be looking for interest of not only shareholders, but all other stakeholders such as employees, labour unions, government, customers and consumers, and public at large.
Close
To ensure this, the Companies Act, 2013 makes at least half of the directors mandatorily to be independent directors.