India Knowledge@Wharton carries a discussion (or a mutual interview of sorts) between Wharton professors Jitendra Singh and Harbir Singh and former SEBI Chairman M. Damodaran on several issues pertaining to Indian corporate governance, including the role of independent directors. The discussion is rich in that it dissects several fundamental issues of Indian corporate governance, such as whether it is prudent for Indian corporate governance to follow other models or whether it should develop a model of its own, a matter that we constantly endeavour to focus on this Blog. It examines the position and role of independent directors in an Indian setting, given the existence of controlling shareholders (or promoters). The discussion is also radical and provocative at some level – for example, there is a suggestion that Indian regulations should consider two-tier boards (similar to those present in certain civil law countries such as Germany and China) that is likely to lead to better monitoring and governance of companies. While the emergence of this line of thought in India is noteworthy, its practicality and likelihood of success is far from being guaranteed. Overall, it is an interesting and thought-provoking discussion.
