Insider Trading Risks Confidence: Sanjiv Mehta

INSIDER TRADING, BOARD independence and transparency are among the areas of improvement in corporate governance highlighted by Sanjiv Mehta, former chairman and managing director of Hindustan Unilever, who is currently executive chairman of global investment firm L Catterton India.

- FE BUREAU

While speaking at IIAS' Corporate Governance Scores event, he said insider trading undermines investor confidence and market integrity. "Despite regulations, enforcement is often insufficient, resulting in a culture where very often, this practice will go unchecked," Mehta said.

In addition, the effectiveness of independent directors is frequently questioned due to insufficient autonomy. "Many boards remain dominated by promoters or majority shareholders, impacting the independence and objectivity of board decisions," he said. Although regulatory changes have tried to improve board independence, issues remain with the selection process and the actual influence that independent directors have in the decision making.