Describing independent directors as “watchdogs of companies”, Union Minister P.P. Chaudhary said they should exercise caution regarding conflict of interest in related party transactions and issues concerning managerial remuneration.
Crucial role
He said that the independent directors must impart a balanced view along with transparency and credibility, adding that they were systemically crucial in monitoring internal financial controls.
“In the company’s best interests, the issue of conflict of interest in related party transactions needs to be looked at judiciously. Independent directors need to exercise special care while looking into such related party transactions,” said Mr. Chaudhary, who is the Minister of State for Ministry of Law, Justice and Corporate Affairs. He was speaking at an orientation programme for newly-appointed independent directors of public sector banks and public sector undertakings, on the Indian Institute of Corporate Affairs (IICA) campus at Manesar in Haryana.
“It is high time to conduct such orientation programmes for independent directors on a regular basis on various provisions, eventually leading to better accountability. The IICA’s role is huge due to the large economic infrastructure in the country,” he said.
