Role of independent directors needs overhaul

This refers to the article, “How to revive corporate governance” (May 3) by Hima Bindu Kota. Corporate governance is one issue which has been bothering Indian Inc since many years and it has not been taken up earnestly. Not only Indian companies but even public sector and private sector banks are prone to failures on corporate governance. Only recently, Deepak Kochhar, husband of ICICI bank MD and CEO Chanda Kochhar, was in the spotlight in the ICICI Bank-Videocon loan case.

Last year, Kotak Mahindra Bank Chairman, Uday Kotak, gave some path-breaking and meaningful suggestions to the Securities and Exchange Board of India (SEBI) on how to improve corporate governance in the country. But it is doubtful if our companies have the guts to implement these suggestions as the Ministry of Corporate Affairs was itself opposed to many suggestions made by SEBI. In order to comply with the recommendations, many companies may have to completely overhaul their board. It is a huge task for as many as 600 odd-companies to appoint a women director in their respective boards. I agree with the writer's view that today's business environment is very complex and ever-changing. Hence, the role of an independent director is critical. Only an independent director can pro-actively help the board take the right decision during any corporate governance fiasco. Just like an independent auditor, the role of an independent director is also critical for fair business practices.