Independent directors and ESG - corporate governance in India

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.