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The Companies (Amendment) Bill, 2003 was an important legislative proposal introduced by the Government of India to amend the Companies Act, 1956. It was presented in the Rajya Sabha on 7 May 2003. The Bill was prepared in the context of major changes taking place in the Indian business environment after liberalisation, globalisation and economic reforms. It was influenced particularly by the recommendations of the Naresh Chandra Committee on Corporate Governance and the Joint Parliamentary Committee that investigated the stock market scam. Its broad objectives were to improve corporate governance, strengthen investor protection, prevent the creation and misuse of shell and vanishing companies, improve the accountability of directors and auditors, and modernise company law. ([Egyankosh][1]) The Bill represented an attempt to make the Companies Act, 1956 more suitable for a competitive and increasingly globalised business environment. The Indian corporate sector was becoming more dependent on capital markets, foreign investment, professional management and modern financial practices. At the same time, corporate scandals and stock market irregularities had raised serious concerns about transparency, accountability and protection of investors. Therefore, the Bill sought to establish stronger standards of corporate conduct while providing greater credibility to the functioning of companies. ([The Times of India][2]) One of the most important features of the Bill was its emphasis on corporate governance. Corporate governance refers to the system through which companies are directed, controlled and made accountable to shareholders and other stakeholders. The Bill proposed several measures to improve the functioning of boards of directors, increase transparency and strengthen managerial accountability. It attempted to ensure that directors acted responsibly and that company management could not easily misuse corporate resources. The Bill gave considerable importance to independent directors. It proposed a legal framework for defining an independent director and specified circumstances that could disqualify a person from being regarded as independent. It also contemplated training for independent directors through institutions prescribed by the Government. The purpose was to ensure that directors could exercise independent judgement and protect the interests of shareholders rather than merely follow the wishes of promoters or management. ([ICSI][3]) Another major proposal _____ ________ ____ __________ _______ _____ ____ _______ _______ ___ ________.
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