‘Directors need not own firm’s offence’
Following the indictment of Mr Keshub Mahindra in Bhopal Gas Tragedy, CII on Wednesday asked the government to insert a clause in the Companies Bill 2009 excluding independent directors from any criminal liability for offences committed by the company.
However, experts and analysts are against any such move which excludes responsibility of the independent directors from the actions of the companies. “CII recommendations should not be accepted as the company is an artificial entity and it is the directors who are responsible for the company,” said Mr Sanjay Parikh, senior Supreme Court lawyer.
“If people don’t want to be held responsible for the company then they should not hold the post of directors,” said Mr Parikh.
In a statement, CII president, Mr Hari Bhartia said that the government should treat non-executive members of the board including non-executive chairmen, differently when it comes to director’s liabilities. The chamber said it has taken note that Mr Mahindra, a former non-executive director of Union Carbide, was charged under the same sections.
“While as board members, independent and non-executive directors have the same legal duties and obligations as executive directors, however, because of their limited involvement in the day-to-day running of the company, it is undesirable for the law to expose them to personal liability,” said CII.
Post new comment