Corporate governance: More rules won't help

Strict enforcement of independent director's accountability for omission and commission of company drives away 'good' independent directors

On April 1, 2014, most of the new provisions (relating to corporate governance) of the Companies Act, 2013, came into force. The objectives of the new provisions are to strengthen the institution of independent directors, improve the effectiveness of the board, empower the shareholders and improve the audit quality. Over this period (2014-2018),  proxy advisory firms have emerged, the Insurance Regulatory and Development Authority of India (IRDAI) issued stewardship code and the Securities and Exchange Board of India (Sebi) mandated mutual funds to disclose their position on resolutions placed before general meetings of companies. 

In 2018, Sebi tightened the regulations