- January 25, 2022
- Posted by: OptimizeIAS Team
- Category: DPN Topics
Subject – Economy
Context – ICICI Bank fines former independent Director Rs 2 lakh
- An Independent Director is a director on a board of directors representing minority shareholders and who does not have a pecuniary relationship with the company or related persons, except for sitting fees.
- Their role is to take a stand unambiguously and independently to have a check and balance on the exuberance of majority shareholders that may expose the company to unwarranted risks.
- In India, the Companies Act, 2013 defines ‘independent directors’ and codifies their duties and responsibilities.
- Schedule IV of the Act lays down the guidelines for professional conduct, role, functions, and duties of independent directors.
- The Companies Act, 2013 has mandated all listed public companies to have at least one-third of the total Directors to be independent.
- Their role requires them to be clinical while businesses expect them to be practical, that’s the tight rope they walk on.