'Independent directors, investors key to good governance'

"We as a government can only provide the regulatory mechanism. We can only give an environment where good corporate governance takes place," he said.

"Today, we have about 8.5 lakh companies and about two-third companies are family-owned. So, the role of independent directors become all the more important. The companies are large and public funds are invested and independent directors play a crucial role," he said.

Noting that good corporate governance has become a requirement of the day, Pilot said that minority shareholders also need to be given a say in the board decisions, as their money is as well invested in the company.

Speaking in detail about the new Companies Bill, which has been cleared by the Lok Sabha, the minister said that it is a comprehensive legislation that would replace rules that are nearly 60 years old.

The first Companies Act of the country was made 99 years ago in 1913, while a committee was set up in 1950 to amend those rules. Nearly six years after this committee was formed, the present Companies Act was enforced in 1956. Since then, numerous amendments have been made to this Act.

"We must have a comprehensive, forward looking Companies Act and law that reflects today's India's economic reality.

Some of the existing provisions are really outdated and they have to be comprehensively reviewed," Pilot said.

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