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Biz judgement rule and directors' liability

Directors, including independent directors, are equally liable for omissions and commissions of the company

Independent directors | board of directors | Shareholders

Asish K Bhattacharyya 

Asish K Bhattacharyya

In a company, the (hereafter, board) has the statutory authority and responsibility to manage and govern the company. The board is the trustee of the funds entrusted to the company by . The auditor is also a key actor in corporate governance. appoint the auditor to report whether financial statements are presenting the true and fair view of the financial position and performance of the company. The auditor’s responsibility also includes reporting fraud or suspected fraud, although he/she is not expected to dig out frauds. The Company (Auditor’s) Report Order (CARO) requires the auditor to report on some specific important issues which are of interest to and regulators. In a way, the auditor reports to shareholders whether the board applied fiduciary standards in decision-making. However, he/she does not comment on the quality of business decisions and the process of decision-making.



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First Published: Sun, March 08 2020. 23:58 IST