Tag: Independent Directors
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Tata Group Companies: “Long-Term Interests” the Key Touchstone
The episode surrounding the Tata Group has taken further twists and turns. After several Tata Group companies expressed their support in favour of Mr. Mistry, who continues to be chairman of several of those companies, one company – Tata Global Beverages – adopted a different stance. In a board meeting held this week, the directors
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The Tata Episode: Corporate Governance and the Continuing Influence of Promoters
It is generally understood that corporate governance norms ought to address agency problems between various actors in a company. Moreover, in companies with concentrated shareholding, the agency problems between controlling shareholders (referred to in India as “promoters”) and minority shareholders tend to be rampant, and hence corporate governance measures need to be targeted to address
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Management Conflicts and Board Independence
In the ongoing saga involving the boardroom battle for the Tata Group, a new development may have significant implications for corporate governance practice in India. Yesterday, a Tata Group company, The Indian Hotels Company Limited (IHCL) notified the stock exchanges of a meeting held among the independent directors of the company. It stated: Taking into
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Briefing on Board Independence
The new edition of the NSE Quarterly briefing is on “Issues in Board and Director Independence” and is drafted by Professor “Bala” N. Balasubramanian. The executive summary is as follows: – Worldwide, corporate governance best practices and regulations recognise the need for boards and directors to be independent and objective. – In a country such
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Independent Directors in Private Debt-Listed Companies
[The following guest post is contributed by Niddhi Parmar of Vinod Kothari & Co.] Earlier under Companies Act, 1956 (section 2(23A)) the term “listed public companies” was in a manner that clearly excluded private companies. Consequently, listed private companies were exempt from certain provisions that were exclusively applicable to listed public companies. However, the Companies
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Bombay High Court on Enforcing Articles and Board Nomination Rights
The last few years have witnessed a dispute between two families that relate to the right to nominate directors to the board of Yes Bank. Earlier this week, the Bombay High Court issued its judgment in Madhu Kapur & Ors. v. Rana Kapoor & Ors., which seeks to resolve the dispute – at least temporarily
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SEBI’s Revisions to Corporate Governance Norms
In April this year, SEBI had announced a revamped clause 49 of the listing agreement specifying the revised corporate governance norms to come into effect from October 1, 2014. This was to bring the SEBI norms in line with the Companies Act, 2013 (2013 Act). However, in certain material respects, the new clause 49 differed
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MCA Clarification on Independent Directors
Based on a request made by various stakeholders, the Ministry of Corporate Affairs (MCA) has issued a clarification explaining some of the provisions of the Companies Act, 2013 relating to independent directors. Some of the aspects clarified include the following: – For the purposes of the definition of an independent director, the concept of “pecuniary
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SEBI Announces the Specifics of Revised Corporate Governance Norms
It was nearly a decade ago in October 2004 that the Securities and Exchange Board of India (SEBI) announced substantial revisions to the corporate governance norms contained in clause 49 of the listing agreement that applies to all public companies listed on an Indian stock exchange. The revisions, however, took effect only from January 1,
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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
