Independent directors

The regulator has sought to build a better governance framework by having a number of “independent” directors on boards. However,“independence” as defined in the code will not ensure that the director concerned will or can make the required contribution nor will it ensure that the so called majority owners will infact appoint a director who will act independently!
Given the incestuous corporate relationships prevalent in our country, the person who fits the code’s definition of “independence” may in reality be less independent than someone who is “not independent” in terms of the code.Independence is a “state of mind” and we need professionals who can be independent of relationships, financial benefits, personal influence and look at the big picture. The regulator should challenging the nomination committees on the criteria used so that they will be careful.

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About surenraj

“Views expressed are my own”
This entry was posted in Governance and tagged . Bookmark the permalink.

2 Responses to Independent directors

  1. trialanderr says:

    I read something interesting on the upcoming CRD IV in that you are required to maintain diversity in your board i.e. at least 40% of the members should be female and at least 40% of them should be between a certain age group.

  2. surenraj says:

    I think this proposal got rejected very recently (the last few days)

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