Ensuring Independence ; the Failure of Satyam's Independent Directors has Exposed the Ineffectiveness of the Policy.

Summary

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In 2000, the centre had amended the Companies Act to provide for two directors on company boards representing small shareholders. It was a great move, except that the clause was diluted fromshalltomayover protests by corporate lobby groups. Now a company can simply choose not to make the appointments.

The policy for independent directors prescribed under the Act and by SEBI in Clause 49 of the Listing Agreement is weak, feel most experts. Here are the three major policy lacunae:

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Extract

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Ensuring Independence ; the Failure of Satyam's Independent Directors has Exposed the Ineffectiveness of the Policy.

Status sells

Clause 49 stops at laying down a few disqualifications, which do not include criminal back...

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