Corporate governance, reporting and regulation Essay

Corporate governance, reporting and regulation - Essay Example independent directors are also appointed in order to have some added benefits in terms of additional knowledge and experience which would be useful for achieving better results by the company. There has always been a debate about the relevance of the independent directors in improving the performance of the company. This project is an attempt to identify and analyse the relevance of the independent directors in improving the organisational performance. The paper discusses the extent to which the appointment of independent director can influence the performance of the company and whether the independent director can improve the performance of the company or not. The meaning and the reasons behind the appointment of the independent directors have been studied and discussed in order to have an idea about the independent directors moreover the role and responsibilities of the independent directors have also been analysed to assess the independent director’s scope in improving the organisational performance. The executive directors are employed by the company therefore the company has a control over them. The concept of the independent director came from the thought of having someone in the board who would think only for the betterment of the company without being influenced by someone. Thus the decisions taken by such person would be unbiased and free of any personal interest. Hence the independent director would be someone who cannot be controlled by the company or its management and could not interfere in the work of the independent director. Hence an independent is a director who was not an employee of the company or any of the related party of the company in the last five years. The independent director should not be the company’s advisor or should not have any contract of personal service where the company or any of its related members is a party to such contract. The independent director should not be related to any non-profit organisation to which the