Splitting CEO’s Duality role: The landscape to independent Board Leadership ?

Shubham Gupta, a 4th year law student at the Institute of Law, Nirma University

*Orginally published at Taxmann.com

Introduction

In 2019, the Indian financial market has confronted many climacteric corporate issues like IL & FS, DHFL, Tata- Mistry, Infosys, etc. which appeal for a change in dynamics of corporate governance and compliance culture. In this regard, regulators and government bodies relentlessly fosters to adopt better compliance practices across the world. One of such advent interventions, the capital market regulator, SEBI vouched for separation of position of chairman and CEOs/ managing directors – which, in turn would cultivate a corporate democracy.Separation of position and roles of the chairman of board and CEOs/Managing directors is assumed on the basis that the management look over the affairs of  the company whereas the board supervises the management, on behalf of the shareholders of the company. Essentially, this demand a non-aligned interest between the board and the management to have effective governance and management.

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