Importance of Independent Directors In Corporate Governance: Ensuring Accountability And Transparency

Abstract

Corporate governance plays a very important role in the success of the company. Independent director is an important constituent of corporate governance. These are those directors who have no material or financial ties with the company and are not part of its management team. Independent directors’ role in corporate governance is to ensure that the board acts in the organization’s and its shareholders’ best interests. This paper discusses the relevance of independent directors in corporate governance and how they might be proved useful in ensuring accountability and transparency. The evolution and the function of independent directors are also discussed thoroughly. The work also looks at some of the difficulties independent directors encounter, including conflicts of interest and the requirement to balance various stakeholders’ interests. The article’s overall message emphasizes the crucial part that independent directors play in guaranteeing the long-term performance of corporations as well as the significance of corporate governance in fostering accountability and transparency.