Fortifying independent directors: Sebi's proposal may fail in practice

One of the unintended fallouts of the Tata-Mistry corporate boardroom battle has been that it exposed the vulnerabilities of independent directors if they happen to be on the wrong side of the principal shareholders. Perhaps taking a cue from this high-profile board-cum-court drama that played out over the last five years, the capital market regulator, the Securities and Exchange Board of India (Sebi), has thrown open for public discussion proposals for fortifying the position of independent directors (IDs).

Key suggestions include: A greater say for minority shareholders in the appointment/removal of IDs through a “dual approval” process; more transparency in