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Festina Lente: Institutional Investors and the Quest for Boardroom Diversity In India
No full textGender diversity in the boardroom is espoused in corporate law literature for two main reasons first, equality between the genders; and second (and more contentious), the ‘business case’, that is, the idea that gender diversity improves business performance of the company. In 2013, India introduced a gender based quota aimed at ensuring at least one female director on the board of a listed company, which yielded little success in the quest towards substantial gender diversity. This paper argues that there is a new phenomenon in Indian corporate governance that may help bring about the much-desired gender diversity – institutional investor activism. Institutional investors have a two-fold incentive to push for gender diversity in their portfolio companies. First, as minority shareholders institutional investors are vulnerable to being exploited by the management, and the increase in monitoring brought about by gender-diverse boards safeguards their interests as shareholders. Second, the rise of ESG investing focused on gender equality impels index funds to strive actively towards ensuring boardroom diversity in their portfolio companies with a view to distinguishing themselves from their competitors. Taking into account the increasing potential of activist funds to bring about meaningful change in corporate governance practices, this paper argues that market driven measures such as the disclosure of stewardship activities and the enforcement of the Shareholder Stewardship Codes may be much more successful than the quota-based laws in driving India Inc. to substantial gender diversity
Measuring the Social Legitimacy of International Investor-State Dispute Settlement: A New Research Agenda
No full textThe international investment law regime (IIL) has been criticised in recent times, where various stakeholders have claimed that the regime’s dispute resolution system lacks ‘legitimacy’. Simultaneously, the regime has encountered a backlash from states, interest groups, and the wider public. The convergence of these two elements has led to serious concern about the regime’s future. Since global initiatives are currently underway to ‘repair’ the legitimacy of IIL’s dispute resolution system, including under the aegis of the United Nations Commission on International Trade Law (UNCITRAL) and pursuant to European Union (EU)-led proposals, the question of assessing such legitimacy has assumed added importance. Although stakeholders have sought to explain why reforms are necessary in light of the underlying ‘legitimacy crisis’, little systematic attempt has been made to design an analytical framework that can evaluate the conflictingly articulated assessments of legitimacy in this regard. On the other hand, while scholars have written at length about the so-called global backlash, they appear to have assumed that such backlash arises because of an objective legitimacy deficit. However, I argue that we need to design an analytical framework that can measure the relationship between backlash and legitimacy – including the possibility of omitted and/or intervening variables. Further, we must base such measurement upon a revised and more sophisticated conceptualization of legitimacy itself. Among other elements, this revised theorization, as well as the appurtenant. framework of analysis, should include a dynamic assessment of ongoing socio-political contestations among relevant stakeholders, including a critical evaluation of the power dynamics between them
Conceptualising India’s Safe Harbour in the Era of Platform Governance
No full textThe push for greater regulation of online platforms has led to calls to re-evaluate the statutory immunities granted to online intermediaries for hosting unlawful third-party content (i.e., safe harbour). This paper argues that greater accountability for online platforms need not interfere with existing (and indeed strengthened) safe harbour protections. However, to achieve this outcome, legislators must recognise the difference in enforcement approaches between secondary liability and platform governance regimes. This paper argues the types of obligations that can be imposed as pre-conditions to safe harbour are different from those that can be imposed as direct statutory obligations. This is because secondary liability is enforced through individual suits against individual pieces of content while direct statutory obligations are continual and apply to all content on and all procedures of a platform. Relying on the principles of secondary liability, this paper outlines the types of obligations that can be meaningfully enforced (and those that cannot) using the tool of secondary liability. Using India’s Intermediary Guidelines as a case study, this paper highlights the importance of matching their type of obligation to the appropriate enforcement mechanism (e.g., transparency mandates cannot be imposed as pre-conditions to safe harbour) and the risks to both free speech and platform accountability of failing to do so. Recognising the difference between how secondary liability and direct statutory duties operate should lead to a reassessment of arguments that call for a dilution of safe harbour in the name of greater platform accountability. The paper concludes that intelligent statutory design can distinguish between the obligations that can be imposed as pre-conditions to safe harbour and those that ought to be direct statutory duties, allowing legislators to achieve greater transparency and accountability from platforms while retaining (and even strengthening) existing safe harbour protections
