DUTIES OF DIRECTORS-A COMPARATIVE ANALYSIS OF INDIAN AND

AMERICAN LAW

The duties of directors, is a topic that has resurfaced in importance with the aftermath
of the Satyam Scam in India which has exposed huge cracks in India's corporate
governance structures. One of the biggest corporate frauds of India was brought about
by the negligence of duties of promoters, directors, auditors and other corporate
officers. The duties of the directors are of prime importance as proper compliance of
the duties of directors could have prevented the entire scam. One of the reasons this
may have happened is because the duties of directors have not been spelt out clearly
in India law and are restricted to basic duties that are derived from agency law. In
India, Directors liability arises because of their position as agents or officers of the
Company and for being in the position of trustees or having fiduciary relation with
the Company or its shareholders. However in American law, the duties of directors
have been laid down clearly through doctrines such as the business judgment rule, the
duty of care doctrine and the duty if loyalty doctrine. It is my opinion that if such
doctrines were incorporated in Indian Corporate law, the duties of the Directors
would be enunciated, and the liability of directors could be made clearer and stricter,
rather than mere liability of breach of fiduciary duty as an agent , which is the current
standard for liability of directors in India This paper seeks to draw a comparison of
the American Corporate law doctrines with regard to director liability with the
various duties of directors in Indian corporate law that may be civil, criminal or
statutory in the subject of directors liability, so as to show the doctrines in American
Corporate law could be adapted in Indian Corporate law.