Title: Independent directors and ESG - corporate governance in India

Authors: I. Sridhar; Neha Singh; Abbas Seikh

Addresses: Indian Institute of Management Indore, Rau-Pithampur Road, Indore, Madhya Pradesh, 453556, India ' Utkal University, Vanivihar, Bhubaneshwar, Odisha, 751004, India ' XLRI Jamshedpur, Sonari, Jamshedpur, Jharkhand, 831001, India

Abstract: The institution of independent directors is viewed as custodians for good corporate governance practices both in the developed and developing world economies. Accordingly, regulatory jurisdictions have entrusted specific duties and responsibilities for independent directors. The purpose of the study is to empirically investigate the relationship between independent directors' role in ESG and thus their impact on firm performance in Nifty 100 index companies. The study reports that independent directors (ID) at the board and at the various committees of the board act as catalysts for enhancing the transparency and disclosures relating to ESG compliance. The study also highlights that independent director functioning enhances the efficacy and efficiency in terms of firm performance on various financial parameters and thus ensures credibility for ESG compliance. Our findings reveal that independent directors and the committees of the board have a significant positive relationship with ESG performance of the companies.

Keywords: environment, social and governance; ESG; independent directors; ID; environment, social and governance; ESG score; firm performance; committees of the board; India.

DOI: 10.1504/IER.2025.143621

Interdisciplinary Environmental Review, 2025 Vol.24 No.1, pp.78 - 96

Received: 20 Feb 2024
Accepted: 23 Jul 2024
Published online: 02 Jan 2025 *

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