Corporate Governance and Investor Protection: Role of Statutory Board Committees Under the Companies Act 2013

Abstract

With the rise of venture capitals, hitting a certain funding benchmark defines the current era of industrial development. At the initial stages of capital-led growth, with “going public” seen as the ultimate goal of corporate players, a discussion around corporate governance would be timely. Investor protection, arguably, has more relevance in the corporate world today than ever, and as such, studying corporate governance from the lens of investor rights, particularly within the matrix of the Companies Act, 2013, is helpful for the burgeoning corporate sector in India. This article, in its first part, seeks to analyze the underlying hurdles in the enforcement various investor rights in a company and why there is a need to safeguard them. In the second part, a discussion on proper corporate governance and its role in investor protection is undertaken. In this part, the significance of board committees as an important part of this structure is highlighted. In the third part, three statutorily mandatory committees and their individual roles in investor protection are discussed, along with their shortcomings that indicate the scope for improvement in the provisions that deal with them. The concluding part reports the major findings of the analysis undertaken.