The Power and Influence of the Indian Board of Directors in the Listed Companies

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TABLE OF CONTENTS

DISCUSSION AND ANALYSIS3

Status of Independent Director4

Independent Directors Emerging As a Peer Group5

Corporate Governance Provisions5

Role of Board of Directors in India6

Board Composition7

Board Leadership and CEO Power10

Board Size12

Busyness of the Board13

REFERENCES16

DISCUSSION AND ANALYSIS

The Indian Board provides a equality between the key managers and provides fiduciary duties must comply with the duty of care (due diligence in making decisions) and the duty of loyalty (to shareholders). The business decisions would be judged by the courts, respectively, the board are vital to the success of the company. In today's world, no one can afford the "luxury one-sided error, sleepy companies and isolationism."If companies cannot compete, they perish" (Fama and Jensen, 1983, pp. 301).

Research on the Indian Board of directors and corporate governance has proliferated in the last decade. Indeed the wave of corporate scandals that came to light during the early 2000s brought the importance of sound corporate governance to the forefront of both public policy and academic research as many of the scandals can be directly attributed to failed corporate governance or more specifically to ineffective boards of directors. Corporate governance is defined as the common uses of the resources of the organization and the conflicts resolution between a numbers of participants working in the organization. Simply put, corporate governance refers to the relationship between the shareholders of the company, its board of directors and managers. The primary role of the Indian Board of directors is to ensure that shareholders' interests are being best served by the decisions of those actually running the company, namely top managers (Donaldson and Preston, 1995, pp. 65). A second important role of the Indian Board is to provide resources that assist the organization in understanding and responding to its environment (Demb & Neubauer, 1992, pp. 197).

The company, the introduction of radical new proposals or intermittent, it is difficult, these developments show a long cycle time and requires the coordination of various levels of business management. Changes that cause the behavior to be utilized by the organization to succeed in the RI. However, when all the problems mentioned above can be successfully treated, higher profit margins tend to follow (Clarke & Clegg, 1998, pp. 96).

Status of Independent Director

The difference between the independent director and his duties is far from the real issues of the business. The chairman or the director of the Indian Board has the power to take decisions. Directors collect their fees for attending the Indian Board meetings and enjoying a good lunch. An independent director adds value to the hoard process by his expertise and strategic business insights. The independent director represents the larger shareholders within the company, now; shareholders want to approve the Indian Board decisions before they are taken (Blair, 1995, Pp. 256). The importance has been given to the independent director by the regulator as well. The audit committee and remuneration committee consists of independent director as chairman. Independent detector needs to "Whistle Blow" or resign ...