THE PARADIGM SHIFT IN INDIAN CORPORATE GOVERNANCE

Abstract

Corporate governance in India is undergoing a paradigm shift from traditional shareholder primacy to a pluralistic accountability model, statutorily mandated by Section 166(2) of the Companies Act, 2013. This provision theoretically elevates the interests of stakeholders such as employees, communities, and the environment to the same legal footing as shareholder returns. However, a critical dichotomy exists between this statutory mandate and its practical enforcement; the lack of direct legal remedies for non-shareholders creates an enforcement gap that threatens to render the pluralist duty a "paper tiger". To understand how stakeholder protection is operationalized de facto, this paper analyses the existing regulatory infrastructure, emphasizing the shift toward mandatory, quantitative transparency through SEBI’s Business Responsibility and Sustainability Reporting (BRSR) framework. Additionally, it evaluates internal board-level institutional mechanisms and landmark judicial interventions, such as the Vedanta v. Orissa Mining Corp. judgment, which highlights the strategic and financial imperative of securing local community consent. The research concludes that while mandatory disclosure and judicial activism currently serve as the primary drivers of corporate accountability, statutory reforms such as expanding class-action standing to affected communities are necessary to close the enforcement gap and fully transform directors into genuine mediators of stakeholder interests.