Independent directors: Underpaid & unappreciated

Independent directors have been in the eye of the storm for their inability to guide companies or being able to stand up to controlling shareholders

A lot is expected — rather demanded — of independent directors. By regulators, through the Companies Act and the Securities and Exchange Board of India’s (Sebi’s) listing obligations, by shareholders and the other stakeholders, and by promoters and managements. Add to this the looming risk of regulatory action, and it is clear why being an independent director is not easy. 

To be an effective board member, you need both knowledge and judgement. As businesses have grown more complex, the knowledge quotient has gone-up exponentially.

Recognising this, the Ministry of Corporate Affairs mandated that to serve on a board today, albeit