Download or read book Analyzing the Independence of Independent Directors written by Nidhi Modi and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The appointment of Independent directors is a corporate governance strategy to ensure transparency, good governance, interest of all stakeholders and prevention of frauds. After corporate frauds such as the Satyam Scandal, Tata-Mistry fiasco, IL&FS fraud, Jet Airways, etc. there were mass resignations by independent directors which led to the questioning of their position and power in a corporation. Thus, the true independence of independent directors has been under scrutiny over the years. Their liability in case of a default or fraud remains unclear. This paper will analyse the development in laws related to independent directors over the years and the effectiveness of the recent amendments bought in by the Securities and Exchange Board of India to address pressing issues related to independent directors. The paper argues that certain aspect of the law related to independent directors still needs to be amended due to the fact that it is inherently a difficult challenge to ensure that an independent director is truly independent.

Download or read book Corporate Governance and Directors Independence written by Yuan Zhao and published by Kluwer Law International B.V.. This book was released on 2011-01-01 with total page 242 pages. Available in PDF, EPUB and Kindle. Book excerpt: More and more, the agenda of corporate governance reform has been calling for a dramatic change in the composition and structure of boards of publicly traded companies, with particular criticism reserved for the role of independent directors. This timely, ground-breaking book takes a new and rigorous approach to this important issue. Investigating board independence from a distinctly original perspective, the author's systematic analysis explores the effective interaction of such aspects as the following: What specific functions are expected of independent directors? How these functions fit with the unitary board structure? Why independent directors are seen as inherently necessary for corporate governance? Whether board independence can be compatible with other governance mechanisms? How mainstream company law is applied to independent directors. The analysis leads to a series of solutions designed to eliminate the real and perceived obstacles to the proper functioning of independent directors. In the process, the author discusses such critical 'moments' in corporate governance as monitoring, public relations, social responsibility, shareholder activism, the danger of 'groupthink', remuneration, collective liability, and codes of conduct. The discussion and analysis chart a course through which independent directors can better serve the goal of improving the system of corporate governance. As such, it will be greatly appreciated by investors, corporate counsel for institutional investors, and policymakers and academics in relevant areas of both business and law.

Download or read book Taxmann s Analysis A Deep Dive into CII Guidelines on Independent Directors Appointment and Board Assessment written by Taxmann and published by Taxmann Publications Private Limited. This book was released on 2024-02-08 with total page 13 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Confederation of Indian Industry (CII) has issued guidelines on Independent Directors' Appointment and Board Assessment, which is divided into two parts: ‣ Part A: It focuses on appointment and succession planning, emphasizing diversity and clarity in roles ‣ Part B: It guides efficient Board Evaluation processes This article aims to discuss the CII guidelines and their impact in a summarized manner, which includes: ‣ Stress the importance of clear responsibilities, continuous succession planning, diversity in board composition, insurance coverage, and fair compensation for Independent Directors ‣ Recommend formalizing indemnity and insurance agreements, aligning compensation with responsibilities, and disclosing action taken based on evaluations ‣ Aim to enhance board effectiveness, mitigate risks, and promote transparency in corporate governance

Download or read book The Handbook of the Economics of Corporate Governance written by Benjamin Hermalin and published by Elsevier. This book was released on 2017-09-18 with total page 762 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Handbook of the Economics of Corporate Governance, Volume One, covers all issues important to economists. It is organized around fundamental principles, whereas multidisciplinary books on corporate governance often concentrate on specific topics. Specific topics include Relevant Theory and Methods, Organizational Economic Models as They Pertain to Governance, Managerial Career Concerns, Assessment & Monitoring, and Signal Jamming, The Institutions and Practice of Governance, The Law and Economics of Governance, Takeovers, Buyouts, and the Market for Control, Executive Compensation, Dominant Shareholders, and more. Providing excellent overviews and summaries of extant research, this book presents advanced students in graduate programs with details and perspectives that other books overlook. - Concentrates on underlying principles that change little, even as the empirical literature moves on - Helps readers see corporate governance systems as interrelated or even intertwined external (country-level) and internal (firm-level) forces - Reviews the methodological tools of the field (theory and empirical), the most relevant models, and the field's substantive findings, all of which help point the way forward

Download or read book The Independent Director in Society written by Gerry Brown and published by Springer Nature. This book was released on 2020-08-28 with total page 282 pages. Available in PDF, EPUB and Kindle. Book excerpt: Things will always go wrong in organisations. The question is how quickly will they get caught and put right? The problem facing every organisation today – our businesses, universities, health services, or the many other sporting and charitable institutions that shape our society – is that the relationship between their executive management and those whose job it is to oversee them (whether they are called non-executive or independent directors, trustees, or governors) has become unbalanced. The Independent Director in Society shows how to rebalance it. Based on original, in-depth research from Henley Business School, this is the first book to survey and analyse the governance crisis right across society rather than just focus upon the business sector. The authors show that – despite their many differences – all organisations have many issues, behaviours and problems in common. The same problems require, in many cases, the same solutions. Sometimes they don’t. The authors offer two answers. The first lies in the realm of policy. Not a need for more legislation, but a move to give the existing codes of practice back their teeth and make them fit for purpose. The second lies with independent directors themselves. Urgent improvement is needed in standards of thought and action as well as the calibre of these directors. Above all, directors need to develop an independent mindset that will enable them to make better, more accurate decisions. There are many elements to creating this culture, including selection, training and education for directors, and support from chairs and executive teams, but most of all directors themselves must recognise their responsibilities in a complex and volatile world.

Download or read book Optimal Board Independence with Gray Independent Directors written by Bartolomé Pascual-Fuster and published by . This book was released on 2017 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: Recommendations of codes on board independence do not match the predictions of optimal board structure theories. We investigate whether firms solve this tradeoff between optimal and recommended levels with gray independent directors, those who do not achieve the formal requirements of independence. We find that in many firms that comply on the proportion of independents, gray independent directors are necessary to reach the recommended level. Additionally, our results show that gray independent directors provide real board independence, suggesting that these directors are not used to solve the mentioned tradeoff. Our results also indicate that firms prefer to bear the cost of non-compliance rather than the cost of deviating from their optimal level of board independence. The empirical analysis, performed in an institutional context in which large controlling shareholders are predominant, indicates that ownership is the most relevant factor to explain optimal board structures.

Download or read book Corporate Governance Independent Directors and Financial Performance written by P. Krishna Prasanna and published by . This book was released on 2006 with total page 25 pages. Available in PDF, EPUB and Kindle. Book excerpt: After 2000, the corporate boards have become more independent and active in pursuing share holders interests. Corporate governance reformers strongly believe that Independent directors can be effective monitors. Never the less, there is still intense debate over the extent an independent board contribute to the value maximization. This paper investigates whether the board independence has any influence in maximizing the firm value. The empirical analysis did not produce evidence to confirm this relationship between independent board and value maximization. However this finding can not be taken to conclude the relationship at the moment as further robustness checks are needed which need to include other related controlling variables such as shareholding pattern, market presence, Industry growth etc.

Download or read book How Independent are Independent Directors The Case of Italy written by Paolo Santella and published by . This book was released on 2007 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper we analyse and quantify the extent to which corporate disclosure for the financial year 2003 allows for verification of the independence of directors formally identified as independent by the 40 Italian blue chips. In order to do this, we used as a benchmark the voluntary independence requirements of the Italian Corporate Governance Code (Preda Code, 2002) and the voluntary independence requirements of the EC Recommendation (2005) on non-executive and supervisory directors (a proxy for international best practice). This is a new methodology that can be applied equally to any other country: to our knowledge so far nobody has systematically verified whether listed companies in fact apply the independence standards they declare that they follow. We find that, for the two key independence requirements of not having business relationships with the company and not having too many concurrent commitments outside the company, the level of compliance is dramatically low: 4% and 16% respectively. Overall, it is possible to verify compliance with all the Italian independence standards for only 5 out of the 284 directors formally identified as independent by their companies, and for only 4 directors with respect to the EC standards. The results of this study bring into question the effectiveness of securities market monitoring and call for further quantitative analysis of corporate governance.

Download or read book Are Independent Directors Effective Monitors In Taiwan A Theoretical Analysis written by Cheng-Fong Chou and published by . This book was released on 2014 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: About a decade ago, Taiwan introduced the institution of independent directors, which has long been advocated as a good corporate governance practice in the United States of America (“U.S.”). At the time, the concept of independent directors then was a whole new legal idea in Taiwan that fundamentally changed the original intention behind the internal corporate governance system in the Taiwan Company Act in which supervisors were supposed to address oversight and to take action against the board of directors and managers. Traditionally, the U.S. corporate conventional wisdom argues that independent directors benefit companies in some aspects, but it is also believed that they could face some inherent limitations while carrying out their monitoring tasks. The most serious issue is how to ensure an independent director has true independence from management. In addition to the limitations that U.S. independent directors normally face, Taiwanese independent directors also encounter other constraints arising from characteristics of Taiwan's business environment. This article argues that independent directors in Taiwan have few chances to rid themselves of the controlling shareholders' influence. Even in the absence of such powerful shareholders, they would still encounter other difficulties in carrying out the monitoring tasks such as insufficient information. This article concludes that as a result, Taiwanese independent directors will function in a very limited way, and can hardly be effective monitors for Taiwanese companies under the current business and legal environment in Taiwan.

Download or read book A Comparative Analysis on Independent Directors Systems Among Different Corporate Governance Systems written by and published by . This book was released on 2013 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book ARE INDEPENDENT DIRECTORS REALLY INDEPENDENT A CROSS JURISDICTIONAL ANALYSIS written by Sheetal Kumar and published by . This book was released on 2021-07-23 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Brillopedia can provide interesting articles about law, socio-legal and contemporary issues. Brillopedia is also providing a platform to publish articles from students, professionals and others. Brillopedia seeks to foster research and writing skills.

Download or read book The Independent Director in China and India written by Cornelius Bader and published by GRIN Verlag. This book was released on 2011-07-11 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: Seminar paper from the year 2010 in the subject Law - Comparative Legal Systems, Comparative Law, grade: A+, Vanderbilt University (Law School), language: English, abstract: The “independent director” has become a centerpiece of modern corporate governance. However, the concept of “independence”, and the ability of independent directors to fulfill their roles, remains deeply problematical. In the course of the discussion on the proper role of independent directors that unfolded in Europe and the United States during the 1980s and 1990s and peaked in the wake of the Enron scandal, rules on director independence have found their way to the corporate governance regimes of developing countries that turned their head to western economies. Particularly in China and India, independent directors have taken their place on company boards, earning mixed responses from the academic and business community. What is the current state of Indian and Chinese rules on director independence? What tensions do they address and create? And what can be done to optimize the achievement of their objectives? The goal of this article is to examine the status quo of director independence in the two countries, to put the regulations into their historic and political context, to summarize practical experiences with the new institution, and to point to possible future developments.

Download or read book Independent Directors in Asia written by Dan W. Puchniak and published by Cambridge University Press. This book was released on 2017-11-02 with total page 637 pages. Available in PDF, EPUB and Kindle. Book excerpt: The first in-depth analysis of the independent director in Asia: who they are, what they do and how they are regulated.

Download or read book The Role of the Independent Director in CEO Supervision and Turnover written by Guido Stein and published by . This book was released on 2011 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: A considerable amount of research has been done on the figure of the CEO, approaching it from many angles. Our analysis focuses on the role played by the independent director in the supervision and turnover of the chief corporate executive. In the process, we have carried out a comprehensive reflection on the independent director, consulting the latest literature and including the results of the most recent empirical evidence. We have noticed that the role of the independent director often goes beyond the tasks that are usually considered specific to this function, namely, supervision of the company's senior management. However, the directors' independence cannot be built by requirements. It is a personal quality of the individual that transcends the various problems raised by agency theory. We believe that correct CEO supervision can only be effectively undertaken if the independent directors have these personal qualities. It seems that companies with a larger number of independent directors are more likely to replace the CEO when performance is not as expected. This can only happen if the independent directors enjoy effective independence.

Download or read book The Role of Independent Directors written by Madoka Shimada and published by . This book was released on 2003 with total page 74 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Independent Directors and Controlling Shareholders written by Lucian A. Bebchuk and published by . This book was released on 2017 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: Independent directors are an important feature of modern corporate law. Courts and lawmakers around the world increasingly rely on these directors to protect investors from controlling shareholder opportunism. In this Article, we argue that the existing director-election regime significantly undermines the ability of independent directors to effectively perform their oversight role. Both the election and retention of independent directors normally depend on the controlling shareholders. As a result, these directors have incentives to go along with controllers' wishes, or, at least, inadequate incentives to protect public investors.To induce independent directors to perform their oversight role, we argue, some independent directors should be accountable to public investors. This can be achieved by empowering investors to determine or at least substantially influence the election or retention of these directors. These “enhanced-independence” directors should play a key role in vetting “conflicted decisions,” where the interests of the controller and public investors substantially diverge, but not have a special role with respect to other corporate issues. Enhancing the independence of some directors would substantially improve the protection of public investors without undermining the ability of the controller to set the firm's strategy. We explain how the Delaware courts, as well as other lawmakers in the United States and around the world, can introduce or encourage enhanced-independence arrangements. Our analysis offers a framework of director election rules that allows policymakers to produce the precise balance of power between controlling shareholders and public investors that they find appropriate. We also analyze the proper role of enhanced-independence directors as well as respond to objections to their use. Overall, we show that relying on enhanced-independence directors, rather than independent directors whose election fully depend on the controller, can provide a better foundation for investor protection in controlled companies.

Download or read book Are Independent Directors Effective Corporate Monitors An Analysis of the Empirical Evidence in the USA and Canada written by Brian Y. Lai and published by . This book was released on 2014 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis explores whether independent directors in the USA and Canada are effective in holding management accountable by: (1) analyzing how the policy of relying on independent directors developed and operates; (2) introducing the main theoretical critiques of independent directors' monitoring effect; and (3) examining whether empirical studies in the field of management science and financial economics support the policy in both countries of relying on independent directors as corporate monitors. Empirical evidence shows that boards with a majority of independent directors, in some circumstances, were associated with better firm performance (in the post-SOX period) and fulfilled certain board tasks effectively in the United States. Canadian studies, however, have not shown a positive association with improved firm performance. Audit committees composed entirely of independent directors have been effective in ensuring the quality of financial reporting in the United States, but this effect has not been found in Canada. Compensation committees composed fully of independent directors neither constrained the level of executive compensation nor tied CEO pay to firm performance in either country. US firms with an audit committee member who had accounting expertise, rather than financial analysis or supervisory expertise, were associated with a higher quality of financial reporting, while Canadian firms with an audit committee member who has financial expertise, instead of financial literacy, were associated with a similar effect. Studies also showed that independent directors perform better in certain circumstances. Based on empirical evidence, US regulators should consider: (1) changing the current mandatory requirements for an independent board and a completely independent compensation committee to a comply-or-explain requirement; (2) narrowing the qualification of a financial expert to an individual who has accounting expertise; and (3) recruiting independent directors who have two or fewer outside directorships, hold more of the corporation's shares, have lower cost of acquiring corporate information, and have no social connections with the CEO. In Canada, weak evidence of the monitoring effectiveness of independent directors supports the existing comply-or-explain approach. Canadian regulators may only need to require or recommend that at least one audit committee member has financial expertise, instead of only financial literacy.