INDEPENDENT DIRECTORS: A COMPARATIVE STUDY OF INDIA AND SINGAPORE

Abstract

Any economy's ability to grow and develop sustainably depends heavily on the corporate sector. Comparatively speaking, jurisdictions with stronger governance are more prosperous than those with weaker corporate governance. Although the concept of an independent director was first introduced in the United States of America as a voluntary measure, it was made mandatory due to issues with management and shareholder agency theory, commonly known as the outsider's model issues. Regardless of the form of corporate governance they were using, the massive business failures that were taking place in different jurisdictions forced regulators all over the world to enact mandatory provisions addressing the Independent Directors. Several other countries adopted the concept to reorganize and rebuild the board structure in order to provide enhanced governance through the nomination of independent directors after the US and UK pioneered in this direction. The current paper's main objective is to examine the legal guidelines governing the independent director positions in Singapore and India, two Asian Pacific countries.