India, July 2026: Independence is an important part of effective corporate governance, but it is often discussed mainly in the context of Independent Directors. Excellence Enablers’ July 2026 newsletter, Edition #123, examines the wider meaning of independence and why it matters across the corporate ecosystem.

The article, titled “Independence – Fact, Fiction and Fantasy,” explains that independence in a boardroom is not about working separately from others. It is about each Director applying his or her own mind to the facts, information available and issues under consideration, while contributing objectively to decision-making.

The discussion also raises an important question: independent of whom? Independent Directors are expected to act objectively and dispassionately rather than simply supporting or opposing management proposals. Independence should not mean automatically disagreeing with the promoter or management. Instead, the focus should remain on the interests of the company and its stakeholders.

The article extends the discussion of independence to the auditing profession. Auditors depend on information provided by management, while also being expected to examine management judgements and provide a balanced view to stakeholders. The newsletter highlights concerns about whether income from non-audit services can affect audit independence and notes that Boards need to consider whether such services could adversely affect the independence of the audit process.

Another important area discussed is Internal Audit. Internal Audit can help organisations identify substantive and procedural shortcomings and is considered an important instrument of risk management. The article points out that when Internal Audit reports to senior management, its ability to comment freely may be affected. It therefore highlights the importance of functional reporting to the Audit Committee. Similar concerns are raised regarding the Compliance function.

The independence of Board committees, particularly the Audit Committee and Nomination and Remuneration Committee, is also examined. These committees need to function objectively while reviewing management decisions, appointing and compensating Directors and Key Managerial Personnel, and considering succession planning. Their ability to perform these responsibilities requires appropriate independence within the governance structure.

The article further considers independence in regulatory organisations. Regulators are expected to provide a level playing field for participants in the regulated environment. The newsletter raises questions about differential treatment and whether regulatory conduct is consistently objective, impartial and even-handed.

The discussion also moves beyond corporate governance to the Judiciary and media. The Judiciary is expected to function independently of the executive, while the media has an important role in providing balanced and correct information. The emergence of social media has further changed the information environment, creating new concerns around accuracy, fairness and objectivity.

The newsletter concludes by connecting independence with conflict of interest, transparency and trust. While laws and regulations can address conflicts of interest, defining and ensuring independence remains more difficult. The article asks whether independence can truly be achieved through rules alone in a world where speed is often given greater importance than accuracy.

Through this discussion, Excellence Enablers highlights that independence is not limited to one category of corporate participants. It is a wider governance principle that supports objective decision-making, accountability and stakeholder confidence.