Protection of stakeholders’ interests in the Indian corporate landscape: examining the “ifs and buts”

ABSTRACT

In the last decade, the Indian corporate landscape has undergone a significant transformation, particularly in terms of establishing rights that benefit stakeholders. These reforms are said to prioritize the interests of stakeholders. New corporate legislations and governance codes are heralded as the harbingers of change. This article argues that despite the legislative reforms, the effectiveness of these changes is limited, and the interests of stakeholders remain largely unprotected. The article also traces the history of the idea of “stakeholderism” in India through legislative changes and judicial interpretations to illustrate the non-linear evolution of the concept guided solely by political-economic factors. The article argues that the laws governing corporations vis-à-vis the rights of stakeholders are nothing more than lip service, ultimately leading to a severe mismatch in the policy vision and implementation. After all, a well-intended law fails to achieve its desired objective if it is inadequately enforced.

KEYWORDS:

• CSR
• fiduciary
• India
• IBC
• governance
• directors
• SEBI
• sustainability
• stakeholder

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

¹ The questions regarding the purpose of the corporation during the early part of the last century led to what is sometimes called the Great Debate. See Lynn Stout, The Shareholder Value Myth: How Putting Shareholders First Harms Investors, Corporations, and the Public (Berrett-Koehler Publishers 2012); Also see E Merrick Dodd, Jr, ‘For whom are corporate managers trustees’ (1931) 45 Harvard Law Review 1145.

² For a discussion of the competing theories and the relevant literature, see Andrew Keay, ‘Stakeholder Theory in Corporate Law: Has it Got What it Takes?’ (2010) 9 Richmond Journal of Global Law & Business 249; Sarah Kiarie, ‘At Crossroads: Shareholder Value, Stakeholder Value and Enlightened Shareholder Value: Which Road Should the United Kingdom Take?’ (2006) 17 International Company and Commercial Law Review 329; Michael P Dooley, Fundamentals of Corporation Law (1st edn, Foundation Press 1995) 97 (Corporate law scholars ‘generally agree that management’s principal fiduciary duty is to maximize the return to the common shareholders…’); Frank H Easterbrook and Daniel R Fischel, The Economic Structure of Corporate Law (Harvard University Press 1996) 2; Stephen M Bainbridge, ‘In Defense of the Shareholder Wealth Maximization Nonn: A Reply to Professor Green’ (1993) 50(4) Washington & Lee Law Review 1423.

³ Adaeze Okoye, ‘Theorising Corporate Social Responsibility as an Essentially Contested Concept: Is a Definition Necessary?’ (2009) 89 Journal of Business Ethics 613, 613–627.

⁴ Umakanth Varottil, ‘The ‘Corporate Purpose’ Debate: Whose Interests Should a Company Serve?’ NDTV Profit Opinion 22 October 2019 <https://www.ndtvprofit.com/opinion/the-corporate-purpose-debate-whose-interests-should-a-company-serve> accessed 10 May 2023.

⁵ The term stakeholder was introduced to primarily safeguard the interest of immediate non-shareholder constituency group of the company viz such as employees. For the initial debate see Times NY, ‘A Friedman Doctrine‐The Social Responsibility of Business Is to Increase Its Profits’ The New York Times (13 September 1970) <https://www.nytimes.com/1970/09/13/archives/a-friedman-doctrine-the-social-responsibility-of-business-is-to.html> accessed 10 May 2023.

⁶ Benedict Sheehy, ‘Scrooge-The Reluctant Stakeholder: Theoretical Problems in the Shareholder-Stakeholder Debate’ (2005) 14 University of Miami Business Law Review 193, 193–240.

⁷ Charles M Elson and Nicholas J Goossen, ‘E. Merrick Dodd and the rise and fall of corporate stakeholder theory’ (2016) 72 The Business Lawyer 735.

⁸ See ‘Our Commitment – Statement on the Purpose of a Corporation’ (Business Roundtable, 2019) <https://opportunity.businessroundtable.org/ourcommitment/> accessed 10 May 2023; ‘Davos Manifesto 2020: The Universal Purpose of a Company in the Fourth Industrial Revolution’ (World Economic Forum, 20 December 2019) <https://www.weforum.org/agenda/2019/12/davos-manifesto-2020-the-universal-purpose-of-a-company-in-the-fourth-industrial-revolution/> accessed 10 May 2023.

⁹ ‘Business Roundtable Redefines the Purpose of a Corporation to Promote an Economy That Serves All Americans’ (Business Roundtable, 19 August 2019) <https://www.businessroundtable.org/business-roundtable-redefines-the-purpose-of-a-corporation-to-promote-an-economy-that-serves-all-americans> accessed 12 November 2023.

¹⁰ Adolf A Berle and Gardiner C Means, The Modern Corporation and Private Property (New Brunswick, NJ, 1997, first published 1932) 110–11.

¹¹ Joshua Bolten, ‘A Good Year for Stakeholder Capitalism’ Wall Street Journal (18 August 2020) <https://www.wsj.com/articles/a-good-year-for-stakeholder-capitalism-11597792536> accessed 12 November 2023.

¹² See, for example, Lucian A Bebchuk, ‘The Myth of the Shareholder Franchise’ (2007) 93(3) Virginia Law Review 729, 729–32; Lucian A Bebchuk, ‘The Case for Increasing Shareholder Power’ (2005) 118 Harvard Law Review 833, 908–13; Robert C Clark, ‘Harmony or Dissonance? The Good Governance Ideas of Academics and Worldly Players’ (2015) 70 Business Lawyer 321, 338.

¹³ Michal Barzuza, Quinn Curtis and David Webber, ‘Shareholder value(s): Index Fund ESG Activism and the New Millennial Corporate Governance’ (2019) 93 Southern California Law Review 1243; Oliver Hart and Luigi Zingales, ‘Companies should Maximize Shareholder Welfare not Market Value’ (2017) 2 Journal of Law, Finance and Accounting 247, 247–74; Eleonora Broccardo, Oliver Hart and Luigi Zingales, ‘Exit versus voice’ (2022) 130(12) Journal of Political Economy 3101, 3101–3145.

¹⁴ A resonance of this idea that the prosocial behaviour of investors will result in welfare maximization over mere wealth be found in recent events in the US. Engine No 1 acquiring a seat on the board of Exxon, shareholders voting against the board at Chevron, David Wallace-Wells, and Carnegie initiatives to use governance as a battleground are some examples. See Pippa Stevens, ‘Engine No. 1 wins at least 2 Exxon board seats as activist pushes for climate strategy change’ CNBC (26 May 2021) <https://www.cnbc.com/2021/05/26/engine-no-1-gets-at-least-2-candidates-elected-to-exxons-board-in-win-for-the-activist.html> accessed 12 November 2023; ‘Shareholder rebellion at Chevron and Exxon as 33% and 28% vote in favour of Paris-consistent climate targets’ Follow This Newsletter (25 May 2022) <https://www.follow-this.org/shareholder-rebellion-at-chevron-and-exxon-as-33-and-28-vote-in-favour-of-paris-consistent-climate-targets/> accessed 12 November 2022.

¹⁵ Larry Fink, ‘A Sense of Purpose’ (Harvard Law School Forum on Corporate Governance, 17 January 2018) <https://corpgov.law.harvard.edu/2018/01/17/a-sense-of-purpose/> accessed 12 January 2023.

¹⁶ Mariana Pargendler, ‘The Corporate Governance Obsession’ (2016) 42(2) Journal of Corporation Law 359, 359–402.

¹⁷ Lucian A Bebchuk and Roberto Tallarita, ‘The Illusory Promise of Stakeholder Governance’ (2020) 91 Cornell Law Review 106.

¹⁸ Lucian A Bebchuk and Roberto Tallarita, ‘Will Corporations Deliver Value to All Stakeholders?’ (2022) 75 Vanderbilt Law Review 1031.

¹⁹ Previous versions of the Companies Act, i.e. the Companies Act 1913 and the Companies Act 1956, were limited to action by secured creditors and shareholders. However, due to the growing activism and judicial precedents, the amended Companies Act has broadened its ambit by including other immediate stakeholders of a corporation. See Companies Act 1956, s 391; Mohammadali Carim Chagla, Roses in December: An Autobiography (Bharatiya Vidya Bhavan 2012) 256; Umakanth Varottil, ‘The Evolution of Corporate Law in Post-Colonial India: From Transplant to Autochthony’ (2015) 31 American University International Law Review 253, 253–325; Tarun Khanna and Krishna Palepu, ‘Globalization and Convergence in Corporate Governance: Evidence from Infosys and the Indian Software Industry’ (2004) 35 Journal of International Business Studies 484.

²⁰ Bala N Balasubramanian, ‘Strengthening Corporate Governance in India: A Review of Legislative and Regulatory Initiatives in 2013–2014’ (2014) IIM Bangalore Research Paper No. 447 (January 2014) <https://www.iimb.ac.in/sites/default/files/inline-files/WP%20No.%20447%20%28Revised%29_0.pdf> accessed 12 January 2022.

²¹ Afra Afsharipour, ‘Redefining Corporate Purpose: An International Perspective’ (2017) 40 Seattle University Law Review 465, 466.

²² Mihir Naniwadekar and Umakanth Varottil, ‘The Stakeholder Approach Towards Directors Duties Under Indian Company Law: A Comparative Analysis’ (2016) NUS Working Paper 2016/006 <https://law.nus.edu.sg/wp-content/uploads/2020/04/006_2016_Umakanth.pdf> accessed 10 January 2023.

²³ For reference see LODR; See also the voluntary code Corporate Social Responsibility Voluntary Guidelines 2009 (MCA 2009); National Guidelines for Responsible Business Conduct 2019 (MCA 2019) <https://www.mca.gov.in/Ministry/latestnews/CSR_Voluntary_Guidelines_24dec2009.pdf> accessed 18 November 2022.

²⁴ See: svarāṣṭre nyāyavṛttaḥ syād bhṛśadaṇḍaśca śatruṣu | suhṛtsvajihmaḥ snigdheṣu brāhmaṇeṣu kṣamānvitaḥ || 32 || which means in his own kingdom he shall be of just behaviour, and on his enemies he shall inflict rigorous chastisement; with loved friends he shall be straightforward and towards Brāhmaṇas tolerant. Manusmriti verse 7.32. See Kauṭilya, The Arthashastra ;(Penguin Books India 1992).

²⁵ Sanjai PR, ‘Philanthropy in India, an Age-Old Tradition’ The Mint (2 October 2014) <https://www.livemint.com/Specials/91k22CWjd0CU36or3ezHoN/Philanthropy-in-India-an-ageold-tradition.html> accessed 9 April 2024.

²⁶ Sohan Lal Meena, ‘Relationship between State and Dharma in Manusmriti’ (2004) 65(1) The Indian Journal of Political Science 29, 29–40.

²⁷ N Sivakumar, ‘Corporate governance and organisation behaviour – Guidelines from Manusmriti’ in Vunyale Narender and Nupur Hetamsaria (eds), Advances in Business and Finance Studies (The Icfai University Press 2006) 189–208.

²⁸ Arjya Majumdar, ‘India’s Journey with Corporate Social Responsibility – What Next?’ (2015) 33(2) The Journal of Law and Commerce 165.

²⁹ See Poulami Bharati and Sanjit Kumar Das, ‘Contemporary Corporate Governance’ (2012) 1(3) Business Spectrum 1.

³⁰ Balakrishnan Muniapan and Sony J Raj, ‘Corporate Social Responsibility Communication from the Vedantic, Dharmic and Karmic perspectives. Critical Studies on Corporate Responsibility’ (2015) 6 Governance and Sustainability 337, 337–354; See also Sandeep Singh, ‘Wise Leadership in Kautilya’s Philosophy’ (2016) 15(1) Philosophy of Management 35, 35–49.

³¹ Gubara S Hassan, ‘The Arthashastra: An Asian/Oriental Treatise On (The Art Of) Governance’ (2015) 13(2) International Studies of Management and Organization 46, 46–74.

³² The Indian Act for registration for joint stock companies was based on the English Companies Act 1844.

In the year 1850, taking the English Joint Stock Companies Act 1844 as a base, a provision was made for registration of joint stock companies in India. After this the Joint Stock Companies Act was passed in India in the year 1857. Thereafter the Companies Act was revised in the year 1866 to mirror provisions of English Companies Act of 1857 and 1866.The Companies Act of 1866 was later replaced by The Indian Companies Act 1913. After India’s independence in 1947, the Government of India appointed a Committee under the chairmanship of Shri H.C. Bhabha in the year 1950 with the object to consolidate the existing corporate laws and to provide a new basis for corporate operation in India. Based on the recommendation of the Bhabha Committee, which in turn was influenced by the English company law, the Indian Companies Act 1956 came into force on 1st April 1956. See Government of India, Report of the Company Law Committee 16 (1952).

³³ Radhey Shyam Rungta, ‘The Rise of Business Corporations in India, 1851–1900’ (1970) 8 Cambridge South Asian Studies 256, 256–257.

³⁴ Ron Harris, ‘The Private Origins of the Private Company: Britain 1862–1907’ (2013) 33(2) Oxford Journal of Legal Studies 339, 339–378.

³⁵ Varottil (n 19).

³⁶ See Companies (Amendment) Act 1936; See also Omkar Goswami, ‘Goras and Desis’ (2016) Penguin Portfolio 31–34.

³⁷ Umakanth Varottil, ‘The Stakeholder approach to corporate law: A historical perspective from India’ in Harwell Wells (eds), Research Handbook on the History of Corporate and Company Law (Edward Elgar 2018) 487–494.

³⁸ Constituent Assembly Debates Official Report <https://eparlib.nic.in/bitstream/123456789/763029/1/cad_19-11-1948.pdf> accessed 9 April 2024.

³⁹ See Constitution of India 1950, arts 38, 39, 42, 43, and 48A.

⁴⁰ ‘A short history of Indian economy 1947–2019: Tryst with destiny & other stories’ Live Mint (14 August 2019) <https://www.livemint.com/news/india/a-short-history-of-indian-economy-1947-2019-tryst-with-destiny-other-stories-1,565,801,528,109html> accessed 20 May 2023.

⁴¹ For a fuller account of Indian labour and industrial laws, see Jagdish Bhagwati and Arvind Panagariya, India’s Tryst with Destiny (Harper Collins 2012).

⁴² Nimish Adhia, ‘The History of Economic Development in India since Independence’ (2015) 20(3) Education about Asia 18, 18–22 <https://www.asianstudies.org/publications/eaa/archives/the-history-of-economic-development-in-india-since-independence/> accessed 20 May 2023.

⁴³ Mundhra scam was the first-ever financial scam in post-independent India which highlighted the concern about the governance measures over corporations. This scam exposed the nexus of capital market speculators and bureaucrats. Justice Chagla committee which investigated the matter in its report has highlighted concerns over the appointment of directors, non-interference by the government in the function of statutory corporations, and duty of care on the part of directors as primary recommendations. Chagla (n 19) 256.

⁴⁴ Varottil (n 19).

⁴⁵ See Companies Act 1956, ss 529-529A, 205, 211, 221, 244, and 352.

⁴⁶ ibid ss 391–394; Arunachala Ramaiya, Guide to the Companies Act (Lexis Nexis 2010).

⁴⁷ Reserve Bank of India, Report of the Committee to Examine the Legal and other difficulties faced by the banks and financial institutions in rehabilitation of sick industrial undertakings and suggest remedial changes in the law (CR 159 1984) <https://rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/CR159_198428EE4281F4E84835A7E3582E30626AF2.PDF> accessed 22 June 2023.

⁴⁸ Sick Industrial Companies (Special Provisions) Act 1985, ss 15, 16, 17, and 18.

⁴⁹ Kristin Van Zwieten, ‘Corporate rescue in India: The influence of the courts’ (2015) 15(1) Journal of Corporate Law Studies 1, 1–31.

⁵⁰ See generally Maharashtra Tubes Ltd v State Industrial and Investment Corporation of Maharashtra Ltd (1993) SCC (2) 144 (Supreme Court of India); Modi Industries Ltd v Nagar Palika, Modinagar (1999) AIR 2000 Allahabad 271 (Allahabad High Court); Raza Textiles Ltd v Appellate Authority for Industrial and Financial Reconstruction (1998) 94 COMPCAS 468 (Allahabad High Court); Hindustan Transmission Products Ltd v Appellate Authority for Industrial and Financial Reconstruction (2001) 58 DRJ 736 (Delhi High Court); Mittal Steels Ltd v Appellate Authority for Industrial and Financial Reconstruction (2004) 118 COMP CAS 661 (Karnataka High Court).

⁵¹ Varottil (n 19) 277–278.

⁵² Companies Act 1956, s 391; See In Re: River Steam Navigation Co Ltd (1967) 2 Comp LJ 106 (Calcutta High Court) (This judgement held that in considering any scheme proposed, the Court will also consider its effects on workers or employees.); In Re Hathisingh Manufacturing Co Ltd (1976) 46 Comp Cas 59 (Gujarat High Court) and Bhartiya Kamgar Sena v Geoffrey Manners & Co Ltd (1992) 73 Comp Cas 122 (Bombay High Court) (The judgement approved the proposition that while sanctioning a scheme of arrangement the court should consider not merely the interests of the shareholders and creditors but also the wider interests of the workmen and of the community); In Re: Shiva Texyarn Ltd v Annamalai Finance Ltd (2003) 114 Com Cases 55 (Madras High Court) (The Court held that the company court has to apply its mind in public interest involved in the merger and section 394 cases, an obligation upon the courts to be satisfied that the scheme is not contrary to public interest.); In Re: Hindustan Level Employee Union v Hindustan Lever Ltd (1994) AIR SCW 4692(Supreme Court of India) (The question that should be fairly posed is: whether it is shown that the affairs of the company have not been carried on in a manner prejudicial to the public interest.); Also see Companies Act 1956, s 443; National Textile Workers Union v Ramakrishnan (P.R.) (1983) AIR 750 SCR (3) (Supreme Court of India) (The judgement stated that a court can hear the employee if it determines the employee should be heard to administer justice).

⁵³ National Textile Workers’ Union v Ramakrishnan (P.R) (n 52) [4].

⁵⁴ Shahzada Nand & Sons v CIT (1977) AIR 1182(Supreme Court of India) [4] (“ … It is obvious that no business can prosper unless the employees engaged in it are satisfied and contented and they feel a sense of involvement and identification and this can be best secured by giving them a stake in the business and allowing them to share in the profits … What is the requirement of commercial expediency must be judged not in the light of the 19th Century laissez faire doctrine which regarded man as an economic being concerned only to protect and advance his self-interest but in the context of current socio-economic thinking which places the general interest of the community above the personal interest of the individual and believes that a business or undertaking is the product of the combined efforts of the employer and the employees … ”); In Re: Hindustan Lever Employees’ Union v Hindustan Lever Ltd (n 52) (It was held that the court must also take into consideration the interest of employees of the companies and the public interest to ensure that their interest is not affected and provision is made for them. This is because this class of persons affected by the scheme has no locus standi in the meeting and the judgement of the majority in their regard need not necessarily be of a great value or a safe guide.). See also R Sukhadia v Aletnbic Chemical Works Co Ltd (1987) 3 Company Law Journal 141 (Gujarat High Court); In Re: Bank of Baroda v Mahindra Ugine Steel Co Ltd (1996) 2 Com Cases 227 (Gujarat High Court); In Re: Mota Investment Private Limited (1990) 1 Comp LJ 285 (Delhi High Court); In Re: Manipal Hotels Limited (C.P. 75 of 1999) (Madras-unreported).

⁵⁵ See National Textile Workers Union v Ramakrishnan (P.R.) (n 52); Panchmahals Steel Ltd v Universal Steel Traders (1976) 46 COMP CAS 706 (Gujarat High Court); Guj Incable Net (Andhra) Limited v Apaksh Broadband Ltd and Ors (2008) 142 COMPA CAS 892 (Andhra Pradesh High Court); Aam Janta v State of Madhya Pradesh (2014) SCC Online NGT 6897 (National Green Tribunal) (hereinafter ‘Aam Janta’).

⁵⁶ ‘On this day in 1991: A landmark budget that changed India’s fortunes’ The Economic Times (24 July 2022) <https://economictimes.indiatimes.com/news/economy/policy/on-this-day-in-1991-a-landmark-budget-that-changed-indias-fortunes/articleshow/93090439.cms> accessed 23 November 2023.

⁵⁷ Ankit Mittal, ‘India’s industrial reforms of 1991: The inside story’ Live Mint (6 August 2016) <https://www.livemint.com/Sundayapp/GEflSNMjdRctaEbPAzxg9M/Indias-industrial-reforms-of-1991-The-inside-story.html> accessed 20 May 2023.

⁵⁸ ‘A short history of Indian economy 1947–2019 tryst with destiny and other stories’ Live Mint (14 August 2019) <https://www.livemint.com/news/india/a-short-history-of-indian-economy-1947-2019-tryst-with-destiny-other-stories-1,565,801,528,109.html> accessed 20 May 2023.

⁵⁹ Pankaj Kumar Gupta and Shallu Singh, ‘Evolving legal framework of corporate governance in India – Issues and challenges’ (2014) 4(2) Juridical Tribune/Tribuna Juridica 240, 240–253.

⁶⁰ See Companies Act 1956, s 372A, sch III. See also Priya Garg, “The duties of nominee directors require greater clarity” The Mint (5 August 2021) <https://www.livemint.com/opinion/online-views/the-duties-of-nominee-directors-require-greater-clarity-11,628,093,667,850.html> accessed 20 November 2023.

⁶¹ See Companies Act 1956, s 396; See also Miheer H Mafatlal v Mafatlal Industries Ltd (1996) Supreme Court JT (8) 205.

⁶² For the debate in the context of protection of employees using the stakeholder theory, see Khanna and Palepu (n 19) 484.

⁶³ Omkar Goswami, ‘Aftermath of Satyam’ Business World (8 November 2014) <www.businessworld.in/article/Aftermath-Of-Satyam/08-11-201455920/> accessed 20 May 2023.

⁶⁴ Ministry of Company Affairs, Report of the Expert Committee on Company Law (JJ Irani Committee Report) (2005) 2.

⁶⁵ Sahara India Real Estate Corporation Ltd. v. Securities and Exchange Board of India [2012] 12 S.C.R. 1 (Supreme Court of India).

⁶⁶ In the matter of Satyam Computers Services Limited WTM/AN/SRO/SRO/29840/2023–24 (Securities and Exchange Board of India).

⁶⁷ Narayanan S, ‘Financial Market Regulation-Security Scams In India with Historical Evidence and the Role of Corporate Governance’ (22 April 2004) <https://mpra.ub.uni-muenchen.de/4438/1/MPRA_paper_4438.pdf> accessed 25 March 2023.

⁶⁸ See also Confederation of Indian Industry, Desirable Corporate Governance Code (CII 1998); Kumar Mangalam Birla Committee, Report of Kumar Mangalam Birla Committee on Corporate Governance (SEBI 1999); N.R. Narayana Murthy Committee, Report of N.R. Narayana Murthy Committee on Corporate Governance (SEBI 2003) to strengthen the disclosure and reporting norms for listed companies in India.

⁶⁹ OECD Principles of CG asserts that the CG framework should recognize stakeholders’ rights established by law or through mutual agreements and encourage active cooperation between corporations and stakeholders in creating wealth, jobs, and the sustainability of financially sound enterprises. G20/OECD Principles of Corporate Governance 2023 <https://www.oecd.org/publications/g20-oecd-principles-of-corporate-governance-2023-ed750b30-en.htm> accessed 20 October 2023.

⁷⁰ Kingsley O Mrabure and Alfred Abhulimhen-Iyoha, ‘Corporate Governance and Protection of stakeholders’ rights and interests’ (2020) 11(1) Beijing Law Review 292, 292–308.

⁷¹ OECD Principles of Corporate Governance (1999) [7] <https://www.oecd-ilibrary.org/docserver/9789264173705-en.pdf?expires=1708502170&id=id&accname=guest&checksum=237A50EA9D91728ABC54BAC9C59BA33B> accessed 10 July 2023.

⁷² National Foundation for Corporate Governance, Report of the Committee Constituted by MCA to Formulate a Policy Document on Corporate Governance (2012) <https://www.sesgovernance.com/pdf/knowledge-vault/MCA-guiding-principles-on-Corporate-Governance.pdf> accessed 21 June 2023.

⁷³ The committee noted: ‘Corporate governance is about relationships and structures. First, it is the relationship between a company’s management, its board of directors, its auditors, its shareholders, its creditors and other stakeholders … ’. ibid 4–5.

⁷⁴ The term ‘short-termism’ refers to planning and objectives for a term of a year or less. However, the usage of the term may vary based on reference to policy, industry, and instruments. Also see Roger Martin, ‘Yes, Short-Termism Really Is a Problem’ Harvard Business Review (9 October 2015) <https://hbr.org/2015/10/yes-short-termism-really-is-a-problem> accessed 8 July 2023.

⁷⁵ The MCA 2009 (n 23); See also The MCA, Vision 2019–2014 <https://www.mca.gov.in/content/dam/mca/documents/VisionDocument_03032020.pdf> accessed 20 June 2023.

⁷⁶ Rudresh Mandal, ‘Directors’ duties, CSR and the tragedy of the commons in India: Mutual coercion mutually agreed upon’ (2021) 23(2) Environmental Law Review 144, 144–168.

⁷⁷ Companies Act, s 166(2).

⁷⁸ The JJ Irani Committee (n 64) adopted an approach similar to that of the UK. ‘Certain basic duties must be spelt out in the act itself – have regard to the interest of employees etc’. See also Standing Committee on Finance (2009–2010) (15^th Lok Sabha), 21^st Report on ‘The Companies Bill, 2009’ (Lok Sabha 2009–10, 328.3657(17)R P9.21).

⁷⁹ The UK Companies Act 2006, s 172 reads as follows.

Duty to promote the success of the company

(1)A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to—

(a)the likely consequences of any decision in the long term,

(b)the interests of the company’s employees,

(c)the need to foster the company’s business relationships with suppliers, customers and others,

(d)the impact of the company’s operations on the community and the environment,

(e)the desirability of the company maintaining a reputation for high standards of business conduct, and

(f)the need to act fairly as between members of the company.

(2)Where or to the extent that the purposes of the company consist of or include purposes other than the benefit of its members, subsection (1) has effect as if the reference to promoting the success of the company for the benefit of its members were to achieving those purposes.

(3)The duty imposed by this section has effect subject to any enactment or rule of law requiring directors, in certain circumstances, to consider or act in the interests of creditors of the company.

⁸⁰ ibid s 172(1)(a)–(d).

⁸¹ While the codification of duties of directors was recommended by the JJ Irani Committee Report which later found its place within Clause 147(2) of the Companies Bill 2008, the inclusion of non-shareholder constituencies within the provision for duties of directors was done on the recommendation made by ICSI to the parliamentary standing committee.

⁸² Company Law Review Steering Group, Modern Company Law for a Competitive Economy: Developing the Framework (2000) [2.21]; Commons COHO, House of Commons – Trade and Industry – Sixth Report (1 April 2003) <https://publications.parliament.uk/pa/cm200203/cmselect/cmtrdind/439/43906.html> accessed 9 February 2023.

⁸³ Company Law Review Steering Group (n 82) 10.

⁸⁴ See Christopher M Bruner, Corporate Governance in the Common-Law World: The Political Foundations of Shareholder Power (Cambridge University Press 2013) 34–44.

⁸⁵ Devarshi Mukhopadhyay and Rudresh Mandal, ‘The End of Shareholder Primacy in Indian Corporate Governance? Says Who?!’ (2020) 46(4) Commonwealth Law Bulletin 595, 595–610.

⁸⁶ Andy Mukherjee, ‘View: India’s crony capitalist edifice is creaking’ Economic Times (24 March 2019) <https://economictimes.indiatimes.com/markets/stocks/news/view-indias-crony-capitalist-edifice-iscreaking/articleshow/68545047.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppstst> accessed 9 February 2023.

⁸⁷ Companies Act, s 166(7).

⁸⁸ Mihir Naniwadekar, ‘Remedies against Directors’ Undue Gains: Personal or Proprietary?’ (IndiaCorpLaw, 12 September 2013) <https://indiacorplaw.in/2013/09/remedies-against-directors-undue-gains.html> accessed 9 February 2023.

⁸⁹ Neeti Shikha in her book notes that the process of codification was never intended towards radically changing the law or the principles of equity. The codification of director duties in the United Kingdom too, was never intended at changing the law. It was done to make the law more accessible and predictable for the common man. See Neeti Shikha, Changing Paradigm of Corporate Governance in India (Bloomsbury 2017) ch 3.

⁹⁰ Rajat Maloo, ‘Shareholder Ratification for Directors’ Breach of Duty’ (IndiaCorpLaw, 14 February 2020) <https://indiacorplaw.in/2020/02/shareholder-ratification-for-directors-breach-of-duty.html> accessed 9 February 2023.

⁹¹ Re: Terrascope Ventures Limited v Securities and Exchange Board of India (2021) Appeal No 116 of 2021 (Securities Appellate Tribunal Mumbai).

⁹² ibid 13.

⁹³ Companies Act, s 245.

⁹⁴ Companies Act, s 245(10).

⁹⁵ Civil Procedure Code 1908, Order 1, Rule 8.

⁹⁶ Rameshwar Prasad Shrivastava and Ors v Dwarkadhis Project Pvt Ltd [2018] SCC Online SC 2734 (Supreme Court of India).

⁹⁷ See Vellore Citizen Welfare Forum v Union of India AIR 1996 SC 2715 (Supreme Court of India); Samatha v State of Andhra Pradesh AIR (1997) SC 3297 (Supreme Court of India); Bombay Dyeing & Mfg. Co Ltd v Bombay Environmental Action Group AIR (2006) SC 1489 (Supreme Court of India); TN Godavarman Thirumulpad v Union of India (2008) 2 SCC 222 (Supreme Court of India); See also Public Liability Insurance Act 1991.

⁹⁸ Foss v Harbottle (1843) 67 ER 189 (Court of Chancery).

⁹⁹ The ‘limited liability clause’ and ‘privity of contract’ safeguards the company from external litigation. It is a well-settled principle in English law. Indirect derivatives actions are not permitted until they directly affect the shareholder or depositors. See generally Public Liability Insurance Act 1991; Vikramaditya Khanna and Umakanth Varottil, ‘The Rarity of Derivative Action in India: Causes and Consequences’ in Dan Puchniak, Harald Baum and Michael Ewing-Chow (eds), The Derivative Action in Asia: A Comparative and Functional Approach (Cambridge University Press 2010) 369, 378–382.

¹⁰⁰ In Re: Rajeev Saumitra v Neetu Singh and Ors (I.A. No. 17545/2015 in CS(OS) No.2528/2015 (Delhi High Court)); Also see Umakanth Varottil, ‘Delhi High Court on Directors’ Duties and Derivative Actions’ (IndiaCorpLaw, 28 February 2018) <https://indiacorplaw.in/2016/02/delhi-high-court-on-directors-duties.html> accessed 11 February 2023.

¹⁰¹ See MK Ranjit singh and Ors v Union of India (2021) SCC Online SC 326 (Supreme Court of India); Aam Janta (n 55).

¹⁰² See Khanna and Varottil (n 99).

¹⁰³ Umakanth Varottil, ‘Minority Shareholders’ Rights, Powers and Duties: The Market For Corporate Influence’, NUS Law Working Paper 2020/006 (February 2020) <https://law.nus.edu.sg/ewbclb/wp-content/uploads/sites/6/2020/06/006_2020_Umakanth.pdf> accessed 20 July 2023.

¹⁰⁴ Jeffrey Lipshaw, ‘The False Dichotomy of Corporate Governance Platitudes’ (2021) 46(2) Journal of Corporation Law 345.

¹⁰⁵ Lynn A Stout, ‘Bad and not-so-bad Arguments for Shareholder Primacy’ (2001) 75 Southern Carolina Law Review 1189.

¹⁰⁶ The UK Companies Act 2006, s 172.

¹⁰⁷ Devarshi Mukhopadhyay and Rudresh Mandal, ‘The End of Shareholder Primacy in India Corporate Governance? Says Who?’ (2020) 46(4) Commonwealth Law Bulletin 595, 595–610.

¹⁰⁸ The UK Companies Act 2006, s 178.

¹⁰⁹ Naniwadekar and Varottil (n 22).

¹¹⁰ Shally Seth, ‘The German Model’ Live Mint (28 December 2009) <https://www.livemint.com/Companies/DgqDIkvaEuDwuLf1f6jkuI/The-German-model.html> accessed 25 May 2023; Nitin Potdar, ‘Why Two-Tier Board Structure is Suitable for Indian companies’ (VCCircle, 27 June 2017) <https://www.vccircle.com/why-two-tier-board-structure-is-suitable-for-indian-corporates> accessed 12 July 2023.

¹¹¹ Sanford M Jacoby, ‘Corporate Governance in Comparative Perspective: Prospects for Convergence’ (2000) 22(1) Comparative Labour Law & Policy Journal 32, 32–36.

¹¹² The Constitution of India provides general directive principles of state policy which cover society, labour welfare, wages, and environment-related aspects and the division of subject matter in Schedule-VII of the Constitution has carefully divided the subject matter between the Union and the States conferring power on them to enact laws protecting social and environmental justice. For instance, environmental protection is envisaged in the Environment Protection Act 1986 and indigenous rights under the Indian Forest Act 1927.

¹¹³ Kobi Kastiel and Lucian A Bebchuk, ‘The Study of Corporate Governance’ (2021) 88(7) The University of Chicago Law Review 1689, 1689–1714.

¹¹⁴ Companies Act, s 178.

¹¹⁵ See Companies Act, s 149(8) and cl II (5–6), Schedule IV.

¹¹⁶ Companies Act, ss 177–178.

¹¹⁷ Naniwadekar and Varotill (n 22).

¹¹⁸ SEBI Circular on Format for Business Responsibility Reporting (4 November 2015), CIR/CFD/CMD/10/2015; See also SEBI Circular on Business Responsibility and Sustainability Reporting by Listed Entities (10 May 2021) SEBI/HO/CFD/CMD-2/P/CIR/2021/562.

¹¹⁹ MK Ranjit v Union of India (n 101).

¹²⁰ Mauricio Andrés Latapí Agudelo, Lára Jóhannsdóttir and Brynhildur Davídsdóttir, ‘A literature review of the history and evolution of corporate social responsibility’ (2019) 4(1) International Journal of Corporate Social Responsibility 1, 1–23.

¹²¹ The Companies (Amendment) Act 2019 and Companies (Amendment) Act 2020 now require companies to deposit the unspent CSR funds into a fund prescribed under Schedule VII of the Act within the end of the fiscal year. This amount must be utilized within three years from the date of transfer, failing which the fund must be deposited in to one of the specified funds. The new law prescribes for a monetary penalty as well as imprisonment in case of non-compliance.

¹²² Companies Act, s 135, sch IV, III (12).

¹²³ Umakanth Varottil, ‘New CSR Rules: The Risks of Greater Rigidity’ NDTV Profit (1 August 2019) <https://www.ndtvprofit.com/opinion/new-csr-rules-the-risks-of-greater-rigidity> accessed 13 May 2023; Ruchika Chitravanshi, ‘India Inc Worried Over Three-Year Jail Provision for Violation of CSR Norms’ Business Standard (1 August 2019) <https://www.business-standard.com/article/companies/firms-fret-overharsh-csr-norms-jail-term-in-companies-act-amendment-119073101867_1.html> accessed 13 May 2023.

¹²⁴ Dirk Matten et al, ‘Behind the Mask: Revealing the True Face of Corporate Citizenship’ (2003) 45 Journal of Business Ethics 109, 111.

¹²⁵ Companies Act, s 135, sch IV list out the procedures and avenue for CSR spending.

¹²⁶ Ministry of Corporate Affairs, Report of the High-Level Committee on Corporate Social Responsibility (Ministry of Corporate Governance, 2019) <https://www.mca.gov.in/Ministry/pdf/CSRHLC_13092019.pdf> accessed 12 January 2023 (acknowledges the fact that CSR mandates are aligned with the nation’s policies on public health, education, conservation of natural resources etc., which broadly falls within the constituted duties of the government).

¹²⁷ Panchali Guha, ‘Why comply with an unenforced policy? The case of mandated corporate social responsibility in India’ (2020) 3(1) Policy Design and Practice 58, 58–72; See also Somasekhar Sundaresan, ‘Govt’s Approach to CSR gives Scope for Corruption’ Business Standard (21 January 2013) <https://www.business-standard.com/article/economy-policy/govt-s-approach-to-csr-gives-scope-for-corruption-1,100,913,000,341.html> accessed 28 July 2023.

¹²⁸ Alex Edmans, ‘How to give shareholders a say in corporate social responsibility’ The Mint (7 December 2020) <https://www.livemint.com/companies/news/how-to-give-shareholders-a-say-in-corporate-social-responsibility-11,607,320,021,304.html> accessed 28 January 2023.

¹²⁹ Debanjali Saha, Rinkesh D and Raj Janagam, ‘Missing spirit of CSR: Structural causes of the challenge’ (Down-to-earth, December 2020) <https://www.downtoearth.org.in/blog/governance/missing-spirit-of-csr-structural-causes-of-the-challenge-74,590> accessed 28 July 2023.

¹³⁰ See Klynveld Peat Marwick Goerdeler (KMPG), ‘India’s CSR reporting survey 2019’ (KPMG, February 2020) <https://assets.kpmg.com/content/dam/kpmg/in/pdf/2020/03/india-s-csr-reporting-survey-2019-summarised.pdf> accessed 20 January 2022.

¹³¹ More than 50% of CSR projects are concentrated in four states. More than 85% projects are concentrated in 11 states. Aline Gatignon and Christiane Bode, “When few give to many and many give to few: Corporate social responsibility strategies under India’s legal mandate” (2023) 44(9) Strategic Management Journal 2099.

¹³² ibid 2104 (‘ … the majority of CSR projects, on average across years, focused on just two social causes – education (35.6%) and healthcare (20.1%). The second tier of projects by popularity focused on rural development (6.1% of projects), eradicating poverty and hunger (5.6% of projects), and environmental sustainability (5.2% of projects). The 22 remaining social causes collectively accounts for only 27.4% of projects on average across years, with each remaining category accounting for 0.03–3.3% of projects’).

¹³³ KR Srivats, ‘New CSR mandate to increase compliance burden for India Inc’ Business Line (13 February 2022) <https://www.thehindubusinessline.com/companies/csr-centre-rolls-out-new-11-page-form-for-comprehensive-collation-of-information/article65037630.ece> accessed 22 February 2022.

¹³⁴ Dinesh Narayanan, ‘How Indian Companies are Misusing Public Trusts to Launder their CSR Spending’ The Economic Times (21 October 2015) <https://economictimes.indiatimes.com/blogs/it-doesnt-add-up/how-indian-companies-are-misusing-public-truststo-launder-their-csr-spending> accessed 28 July 2023.

¹³⁵ Report of the High-Level Committee on CSR (n 126). The report has highlighted the surge in CSR in last quarters for the period between 2015–2019. The data has been assessed as per the filings received by MCA as on 31st March 2019.

¹³⁶ Pushpa Sundar, ‘Five Years After CSR Became Mandatory, What Has It Really Achieved?’ The Wire (21 August 2018) <https://thewire.in/business/five-years-after-csr-became-mandatory-what-has-it-really-achieved> accessed 12 September 2023.

¹³⁷ Report of the High-Level Committee on CSR (n 126).

¹³⁸ Saha and others (n 129).

¹³⁹ Jean J du Plessis, Umakanth Varottil and Jeroen Veldman (eds), Globalisation of Corporate Social Responsibility and its Impact on Corporate Governance (Springer International Publishing 2018).

¹⁴⁰ See Companies (Corporate Social Responsibility Policy) Rules 2014, rules 6 and 8.

¹⁴¹ Asish K Bhattacharyya, ‘IL&FS crisis: learning in corporate governance’ Business Standard (7 October 2018) <https://www.independentdirectorsdatabank.in/img/partners/617fb73b84d67.pdf> accessed 11 February 2023; See also Umakanth Varotill, ‘SEBI’s backtrack on independent directors’ The Indian Express (14 July 2021) <https://indianexpress.com/article/opinion/columns/tata-mistry-corporate-dispute-nusli-wadia-sebi-appointment-removal-of-independent-directors-7,403,380/> accessed 11 February 2023.

¹⁴² Jayshree P Upadhyay, ‘Why Independent directors are rushing for the exit door’ The Mint (19 December 2018) <https://www.livemint.com/Companies/bntAau6XcAhPfTZ5yCVx7O/Why-independent-directors-arerushingfortheexit-door.html> accessed 14 February 2023.

¹⁴³ LODR (n 23).

¹⁴⁴ LODR, reg 4(2)(d) and (f).

¹⁴⁵ BRR was first introduced through the National Voluntary Guidelines on Social, Environmental & Economic Responsibilities of Business 2011. The MCA also released National Guidelines on Responsible Business Conduct in March 2019. In August 2020, the MCA released a report, recommending a new reporting framework called the BRSR, which would serve as a single source for all non-financial disclosures, including ESG parameters.

¹⁴⁶ Bankruptcy Law Reforms Committee (BLRC), Report of the Bankruptcy Law Reform Committee Vol. I: Rationale and Design (November 2015) <https://ibbi.gov.in/BLRCReportVol1_04112015.pdf> accessed 10 July 2023; The Insolvency and Bankruptcy Code 2016 (MCA 2016) <https://www.mca.gov.in/Ministry/pdf/TheInsolvencyandBankruptcyofIndia.pdf> accessed 10 July 2023. ibid.

¹⁴⁷ LODR, reg 21, sch II.

¹⁴⁸ SEBI Circular on Business responsibility and sustainability reporting by listed entities (10 May 2021) SEBI/HO/CFD/CMD-2/P/CIR/2021/562.

¹⁴⁹ ‘SEBI comes out with disclosure requirements under Business Responsibility and Sustainability Report’ The Economic Times (11 May 2021) <https://economictimes.indiatimes.com/markets/stocks/news/sebi-comes-out-with-disclosure-requirements-under-business-responsibility-and-sustainability-report/articleshow/82533681.cms> accessed 20 January 2023; See also Vasanthi Srinivasan et al, ‘Assessment and Evaluation of Business and Human Rights Reporting’ (2020) Corporate India, IIM Bangalore and National Human Rights Commission Joint Study <https://nhrc.nic.in/sites/default/files/Assessment%20and%20Evaluation%20of%20Business%20and%20Human%20Right.pdf> accessed 20 January 2023.

¹⁵⁰ The Outlook ESG Bharat Survey on ESG adoption in the country found that only 33% of the surveyed business leaders thought their organizations were equipped to build a long-term strategy for ESG adoption. See Naina Gautam, ‘SEBI’s Got Indian Thoughts on ESG Push’ Outlook Business (1 September 2023) <https://www.outlookbusiness.com/strategy-4/feature-17/sebis-got-indian-thoughts-on-esg-push-6841> accessed 1 September 2023.

¹⁵¹ SEBI Consultation Paper on ESG Disclosures, Ratings and Investing <https://www.sebi.gov.in/reports-and-statistics/reports/feb-2023/consultation-paper-on-esg-disclosures-ratings-and-investing_68193.html> accessed 20 February 2023. BRSR Core is a sub-set of BRSR, consisting of a set of Key Performance Indicators (‘KPIs’)/metrics under nine ESG attributes.

¹⁵² See LODR, regs 13, 18, 20 and 21.

¹⁵³ Medha Srivastava and Adamya Vikrant, ‘Analysis of Kotak Committee Recommendations on Corporate Governance’ Mondaq (3 January 2020) <https://www.mondaq.com/india/corporate-governance/875864/analysis-of-kotak-committee-recommendations-on-corporate-governance> accessed 28 July 2023.

¹⁵⁴ The SEBI, Report Submitted by the Committee on Corporate Governance (5 October 2017) <http://www.nfcg.in/KOTAKCOMMITTEREPORT.pdf> accessed 28 July 2023.

¹⁵⁵ The SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 2011, which governs the rights of non-promoter shareholders in listed entities as well as the SEBI (Prohibition of Insider Trading) Regulations 2015, which seeks to prevent the leak of unpublished price sensitive information in listed entities through established internal mechanisms.

¹⁵⁶ The SEBI (Issue of Capital and Disclosure Requirements) Regulations 2018.

¹⁵⁷ Karanam Nagaraja Rao, ‘Analysis of Corporate Frauds in India from ethical perspective’ (2015) Twelfth AIMS International Conference on Management <http://www.aims-international.org/aims12/12A-CD/PDF/K318-final.pdf> accessed 28 July 2023.

¹⁵⁸ IRDAI, ‘Revised Guidelines on Stewardship Code for Insurers in India’ (7 February 2020) <https://irdai.gov.in/document-detail?documentId=393635> accessed 23 June 2023.

¹⁵⁹ PFRDA, ‘Common Stewardship Code’ (4 May 2018) <https://www.pfrda.org.in/writereaddata/links/circular-%20common%20stewardship%20code%2004-05-186ec9a3b4-566b-4881-b879-c5bf0b9e448a.pdf> accessed 23 July 2023.

¹⁶⁰ The SEBI, ‘Stewardship Code for all Mutual Funds and all categories of AIFs, in relation to their investment in listed equities’ (24 December 2019) <https://www.sebi.gov.in/legal/circulars/dec-2019/stewardship-code-for-all-mutual-funds-and-all-categories-of-aifs-in-relation-to-their-investment-in-listed-equities_45451.html> accessed 24 July 2023.

¹⁶¹ ‘SEBI asks institutional investors to follow ‘transparent’ Stewardship Code’ The Economic Times (6 April 2021) <https://economictimes.indiatimes.com/markets/stocks/news/sebi-asks-institutional-investors-to-follow-transparent-tewardshipcode/articleshow/81930149.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst> accessed 24 July 2023.

¹⁶² Umakanth Varottil, ‘Shareholder Stewardship in India: The Desiderata’ (2020) NUS Law Working Paper 2020/005 7–8 <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3538037> accessed 24 November 2023; See also Umakanth Varottil, ‘Calls for Socially Responsible Investing’ (IndiaCorpLaw Blog, 15 April 2017); Umakanth Varottil, ‘The Influence of Foreign Investors and Proxy Advisory Firms on Corporate Governance’ (IndiaCorpLaw Blog, 17 September 2018) <https://indiacorplaw.in/2018/09/influence-foreign-investors-proxy-advisory-firms-corporate-governance.html> accessed 25 November 2023.

¹⁶³ Jason D Woodard, ‘Racing to Resolution: A Preliminary Study of India’s New Bankruptcy Code’ (2020) 52 George Washington International Law Review 393.

¹⁶⁴ World Bank, Doing Business Report (2017–2022) <https://data.worldbank.org/indicator/IC.BUS.EASE.XQ?locations=IN> accessed 24 July 2023.

¹⁶⁵ BLRC (n 146).

¹⁶⁶ ibid.

¹⁶⁷ See IBC 2016, ss 5(20) and 8.

¹⁶⁸ Abhilash Pillai and Tarun Agarwal, Cyril Amarchand Mangaldas, ‘India: Home Buyers = Financial Creditors: Supreme Court Reigns’ (Mondaq, 15 August 2019) <https://www.mondaq.com/india/real-estate/837088/home-buyers-financial-creditors-supreme-court-reigns#:~:text=India%3A%20Home%20Buyers%20%3D%20Financial%20Creditors%3A%20Supreme%20Court%20Reigns&text=The%20Supreme%20Court%20in%20Pioneer,2018%20(Amendment%20Act)2> accessed 25 July 2023.

¹⁶⁹ The IBC 2016, s 29A(d) and (e), sch XII, which specifies the ineligibility of bidder company on the ground of conviction under social, economic and environmental laws.

¹⁷⁰ BLRC (n 146) 24.

¹⁷¹ MP Ram Mohan, ‘Tracing Director Liability Framework During Borderline Insolvency and Corporate Failure in India’ (2021) IIMA Working Papers WP, Indian Institute of Management Ahmedabad, Research and Publication Department.

¹⁷² See Tristar Consultants v M/s. V Customer Services India Pvt Ltd & Anr 139 (2007) DLT 688 (Delhi High Court).

¹⁷³ IDBI Bank Limited v Jaypee Infratech Limited, CA No. 223/ALD/2018 (National Company Law Tribunal); <https://ibbi.gov.in/uploads/meetings/e8e306852963ae62b5fe59c298edb97d.pdf> accessed 14 February 2023.

¹⁷⁴ See ArcelorMittal (India) (P) Ltd v Satish Kumar Gupta (2019) 2 SCC 1 (Supreme Court of India); Maharashtra Seamless Limited v Padmanabhan Venkatesh & Others Civil Appeal No 9036 of 2019 (Supreme Court of India); Committee of Creditors of Essar Steel India Limited Through Authorized Signatory v Satish Kumar Gupta & Others Civil Appeal No 8766–67 of 2019 (Supreme Court of India).

¹⁷⁵ ArcelorMittal India Private Limited v Satish Kumar Gupta (n 174).

¹⁷⁶ Devendra Mehta, ‘View: It’s time for a green insolvency and bankruptcy code’ The Economic Times (9 July 2021) <https://economictimes.indiatimes.com/news/economy/policy/view-its-time-for-a-green-insolvency-and-bankruptcy-code/articleshow/84262923.cms> accessed 14 February 2023.

¹⁷⁷ BLRC (n 146).

¹⁷⁸ The IBC 2016, s 29A(d), sch-XII.

¹⁷⁹ BLRC (n 146).

¹⁸⁰ B Sriram, ‘A Code of Conduct for Committee of Creditors’ <https://ibbi.gov.in/uploads/resources/6736e357f5c139e6402b038f4492e10b.pdf> accessed 10 February 2023.

¹⁸¹ Committee on Finance, Thirty-Second Report on Implementation of Insolvency and Bankruptcy Code – Pitfalls and Solutions (August 2023) <https://eparlib.nic.in/handle/123456789/811572?view_type=search> accessed 10 March 2023. The Committee specified that ‘there is an urgent need to have a professional code of conduct for the CoC which will define and circumscribe their decisions, as these will have larger implications for the efficacy of the Code’.

¹⁸² Sriram (n 180).

¹⁸³ Gireesh Chandra Prasad, ‘IBC Experts Push for Creditors’ Standards’ The Mint (1 March 2023) <https://www.livemint.com/news/india/ibc-experts-push-for-creditors-standards-11677695421510.html.> accessed 10 March 2023.

¹⁸⁴ Insolvency Law Academy, ‘Statement of Standards in Conduct and Performance for Creditors’ Insolvency Law Academy (February 2023) <https://insolvencylawacademy.com/wp-content/uploads/2023/03/wg-report.pdf> accessed 10 March 2023.

¹⁸⁵ Jeff Schwartz, ‘De Facto Shareholder Primacy’ (2020) 79(3) Maryland Law Review 652.

¹⁸⁶ Amir Barnea and Amir Rubin, ‘Corporate social responsibility as a conflict between shareholders’ (2010) 97 Journal of Business Ethics 71, 71–86.

¹⁸⁷ Edward Freeman and David Reed, ‘Stockholders and Stakeholders: A new Perspective on Corporate Governance’ (1983) 25(3) California Management Review 18, 18–106.

¹⁸⁸ Ann M Lipton, ‘Not Everything is About Investors: The Case for Mandatory Stakeholder Disclosure’ (2020) 37 Yale Journal on Regulation 550.

¹⁸⁹ Ronald J Gilson and Reinier H Kraakman, ‘The Mechanisms of Market Efficiency’ (1984) 70 Virginia Law Review 549.

¹⁹⁰ Oliver Hart and Luigi Zingales, ‘Exit versus voice’ (2022) 130(12) Journal of Political Economy 3101, 3101–3145.

¹⁹¹ ‘‘Going Dark’: Navigating the Tricky Path to Delisting and Deregistering | Skadden, Arps, Slate, Meagher & Flom LLP’ (1 January 2023) <https://www.skadden.com/insights/publications/2023/09/the-informed-board/going-dark-navigating-the-tricky-path> accessed 10 March 2023.

¹⁹² Cyrus Aghamolla and Richard T Thakor, ‘Do Mandatory Disclosure Requirements for Private Firms Increase the Propensity of Going Public?’ (2019) 60(3) Journal of Accounting Research 755.

¹⁹³ Benjamin E Hermalin and Michael S Weisbach, ‘Information Disclosure and Corporate Governance’ (2012) 67 The Journal of Finance 195; Shital Jhunjhunwala and Sharvani B, ‘Corporate Governance Disclosure and Transparency Framework’ (2011) 4 Indian Journal of Corporate Governance 62.

¹⁹⁴ Sebastian Steuer and Tobias H Tröger, ‘The role of disclosure in green finance’ (2022) 8(1) Journal of Financial Regulation 30.

¹⁹⁵ George A Akerlof, ‘The market for ‘lemons’: Quality uncertainty and the market mechanism’ (1970) 84(3) The quarterly journal of economics 488, 488–500.

¹⁹⁶ ‘SEBI Awareness Programmes’ <https://investor.sebi.gov.in/awar-program.html> accessed 25 March 2023; Also see ‘IBBI Organises Series of Awareness Programmes for Officers Income Tax Department’ <https://pib.gov.in/Pressreleaseshare.aspx?PRID=1773109> accessed 25 March 2023.

¹⁹⁷ See the IBC 2016, Preamble; BLRC (n 146).

¹⁹⁸ Monica Yadav, ‘Banks Take 70% Haircut in 612&nbsp; Resolved Cases so Far under IBC…’ New Indian Express (17 February 2023) <https://www.newindianexpress.com/business/2023/feb/17/banks-take-70-haircut-in-612resolved-cases-so-far-under-ibc-2548292.html> accessed 17 February 2023; See also KR Srivats, ‘IBC Cases: For Every ₹100 of Claims Admitted, Banks Took Haircut of ₹69’ The Hindu Businessline (24 August 2022) <https://www.thehindubusinessline.com/money-and-banking/ibc-cases-for-every-100-of-claims-admitted-banks-took-haircut-of-69/article65806562.ece> accessed 24 August 2023.

¹⁹⁹ The IBC 2016, s 29.