Why don't independent directors call out red flags when they quit?

Despite SEBI’s clear mandate that resignation letters of independent directors disclose detailed reasons, most departures from Indian boards still cite “personal” or “preoccupation” as explanations. In the past six years, more than 3,100 independent directors have stepped down, but only 22 cited governance disagreements or red flags, a troubling signal for corporate accountability.

Our Founder and MD, Mr. Shriram Subramanian, shared his expert views in the Mint article. He explained that not all independent directors are comfortable disclosing the real reasons for leaving. Many simply cite personal or health issues, and in some cases, a director may suspect red flags but not have enough data points to confirm them. He further noted that while regulations and guidelines are adequate, the market regulator needs to be more proactive in enforcement, adding that prompt actions and swift probes are essential to address such governance issues effectively.

Read the full article: https://www.livemint.com/companies/people/corporate-governance-issues-irregularities-independent-directors-disagreements-with-management-resignations-krbl-gensol-11758107231577.html