The NSE Centre for Excellence in Corporate Governance (CECG) has issued its most recent quarterly briefing titled Stakeholder Responsibility of Corporate Boards, which has been authored by Mihir Naniwadekar and myself. The executive summary is as follows:
– The interests of stakeholders (besides shareholders) have become quite prominent to necessitate their recognition by corporate boards;
– Apart from legal requirements, global trends point towards greater stakeholder engagement as a means to enhance the reputation of companies;
– Corporate law reform in India has introduced duties of directors on boards to act in the interests of stakeholders such as employee, community and the environment;
– However, significant challenges emerge, and practical considerations need to be addressed;
– Corporate boards would do well to adopt measures to engage with stakeholders.