IndiaCorpLaw

Companies Act, 2013: Directors’ Duties and Liabilities

The NSE Centre for Excellence in
Corporate Governance (CECG) has issued its most recent quarterly briefing
titled “Directors’
Duties and Liabilities in the New Era
”. The executive summary is as
follows:

– Since directors
and the board play a pivotal role in corporate governance, the law foists
duties and liabilities on them;

– The Companies
Act, 2013 has brought about a paradigm shift by considerably enhancing
directors’ duties and liabilities;

– The directors’
duties are now codified and extend to considering the interests of stakeholders
other than shareholders;

– Directors are,
however, entitled to various protective measures in the form of mitigating
factors either conferred upon them by law or through practical mechanisms they
may establish.

This would not have been possible
without the excellent inputs and suggestions received from members of the CECG at
various points in time during the drafting process.