Shouldering The Load: The Board Of Directors’ Joint Accountability For Corporate Governance
This article was first published on April 16, 2024 by MNLU MUMBAI’s Journal on Corporate Laws & Commercial Regulations on Manupatra.
This article explores the critical
role of the Board of Directors in corporate governance,
emphasizing the significance of their collective responsibility.
It underscores the challenges faced by corporates from
a governance perspective, particularly in the aftermath
of the financial crisis, and raises a critical, yet
underexplored question: whether fiduciary liability
should be assessed individually or collectively. The
article while highlighting the board’s role in decision-making,
risk mitigation, transparency, accountability, and stakeholder
confidence also discusses the legal framework, especially
the Companies Act, 2013.
The narrative unfolds to address
concerns related to potential drawbacks of collective
responsibility, such as deterring experienced directors
from joining boards due to personal liability fears.
The paper asserts that effective corporate governance
is crucial for a company's success and sustainability.
It advocates for a balanced approach between individual
accountability and collective responsibility, emphasizing
the need for continuous assessment and adaptation of
regulations. The collaborative efforts of stakeholders
are deemed vital for upholding transparency, integrity,
and ethical behaviour, ultimately contributing to the
organization’s success and societal impact.
Shouldering The Load: The Board Of Directors’ Joint Accountability For Corporate Governance
This article was first published on April 16, 2024 by MNLU MUMBAI’s Journal on Corporate Laws & Commercial Regulations on Manupatra.
This article explores the critical
role of the Board of Directors in corporate governance,
emphasizing the significance of their collective responsibility.
It underscores the challenges faced by corporates from
a governance perspective, particularly in the aftermath
of the financial crisis, and raises a critical, yet
underexplored question: whether fiduciary liability
should be assessed individually or collectively. The
article while highlighting the board’s role in decision-making,
risk mitigation, transparency, accountability, and stakeholder
confidence also discusses the legal framework, especially
the Companies Act, 2013.
The narrative unfolds to address
concerns related to potential drawbacks of collective
responsibility, such as deterring experienced directors
from joining boards due to personal liability fears.
The paper asserts that effective corporate governance
is crucial for a company's success and sustainability.
It advocates for a balanced approach between individual
accountability and collective responsibility, emphasizing
the need for continuous assessment and adaptation of
regulations. The collaborative efforts of stakeholders
are deemed vital for upholding transparency, integrity,
and ethical behaviour, ultimately contributing to the
organization’s success and societal impact.
You can direct your queries or comments to the author
Disclaimer
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not be construed as legal opinion. View detailed disclaimer.
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