The role of Independent Director features prominently in
Corporate Governance Codes. In India, the Companies Act 2013 (the
Act) and SEBI (Listing Obligations and Disclosure Requirements)
Regulations 2015 have completely revamped the country's
corporate governance code.
Corporate governance generally places a fair amount of emphasis
on the independence of a Board and the corporate governance models
in India have drawn large references from the recommendations of
the Cadbury Committee (1992) of the UK and the Sarbanes-Oxley Act
of 2002 of the USA.
A director is independent only if the Board affirmatively
determines that he or she has no material relationship with the
company that adversely affects his or her ability to be independent
from management in connection with the performance of duties as a
Board member and committee member. This assessment is fact
specific and when assessing the materiality of such relationship,
the Board should consider the source of the
