Board Agility

Corporate Governance and the Role

of Directors

M.S.Sundara Rajan

mssrajan@hotmail.c
om

Corporate Governance : Shocks and Scams

Shocks

Aftermath

1992
Harshad Mehta

National Task Force Chaired by Rahul Bajaj

Spoke about Board role / transparency
Non Exec directors appointment
Attendance priority for directors

Kumar Mangalam Birla Committee Report (20

Introduced Code of Corporate Governance
Safeguards against insider trading
Introduced committees (audit, shareholder etc)

1996
Cobbler Scam

2000-2002
Enron
UTI

2002-2003
Ketan Parekh

2008
Satyam
Lehman
Brothers

Naresh Chandra Committee

Report (2001)
Disqualifications for audit
assignments
Auditors appointment /
R Narayana Murthy Committee Report (2003
disclosures
Stronger audit committee
Role of independent directors
quality of financial disclosures,
corporate executive boards to determine Risks

Naresh Chandra Committee Report (2009)

Changes to Prevention of Corruption Act
Chairman of staff committee

mssrajan@hotmail.c
om

Growing Elements of Corporate

Governance

Corporate
governance is
not a matter
or right or
wrong.
It is more
nuances than
that

Advocate Johan Myburgh

mssrajan@hotmail.c
om

Board Strategy Insights from Robert Ian Tricker

Robert Ian Tricker

Corporate Governance
Guru
A unitary board, with both executive and outside directors, is responsible for both the
overall performance of the enterprise and its conformance with strategies, polices and
codes. In a two tier board the roles are separated.
Corporate governance is different from management. Management runs the
enterprise. The board or governing body ensures that it is being run well and in the
right direction.

mssrajan@hotmail.c
om

How to build effective Boards ?

Strengthen
Management

Timely &
Balanced
Disclosures

Value
Creators

Advocates of
Public /
Security
holders

Ethics &
Responsibility

Risk Busters

mssrajan@hotmail.c
om

Protectors of
Integrity

Employee
Voice
/ Fair
Remuneration

As per Companies Act 2013 .

mssrajan@hotmail.c
om

As per Companies Act 2013 .

mssrajan@hotmail.c
om

Board Meeting Dynamics

Overview of board meeting
Periodicity of the board meetings 1 meeting in a period of 3 months, 4 meeting
in a year
Interval between 2 board meetings 1st Jan or 31st March, April to June.
Notice of board meeting 7 days before the meeting
Day of holding meeting Working day, not on public holiday
Time of holding board meetings Business hours / outside business hours
Place for holding board meeting Companys registered office / Head office /
abroad
Quorum of the board meeting 1/3 of its total strength of directors
Time, day & place for holding adjourned board meetings Working day
Directors cannot appoint a proxy for board meetings

mssrajan@hotmail.c
om

Duties of Director
A director shall act in accordance with the articles of the company
A director shall act in good faith in order to promote the objects of the
company for the benefit of its members as a whole, and in the best
interest of the company, its employees, the shareholders, the community
and for the protection of environment.
A director shall exercise his duties with due and reasonable care, skill
and diligence and shall exercise independent judgment
A director shall not involve in a situation in which he may have a direct
or indirect interest that conflicts, or possibly may conflict, with the
interest of the company
A director shall not achieve or attempt to achieve any undue gain or
advantage either to himself or to his relatives, partners, or associates

mssrajan@hotmail.c
om

Liability of Directors
Liability to outsiders
Liability to the Company
Liability to the shareholders
Liability for statutory defaults and violations
Directors Liability for Acts of Co-directors
Vicarious Liability
Criminal Liability
Liability as an officer in default
Insurance

mssrajan@hotmail.c
om

10

How to improve Gender Diversity in Boards

Improving gender diversity as a
company's talent management strategy

part

of

Frequent and regular Reporting of Board Gender

diversity as a part of board meeting
Companies must have an optimal representation
of women in board
Retention strategy for women in board
The board needs to understand the barriers to
women progressing to senior executive levels
Finding out how competitors is handling gender
diversity
Female role models must be promoted to boards
Boards need to create frequent plans to articulate
its commitment to diversity
mssrajan@hotmail.c
om

11

Thank You
M.S.Sundara Rajan

12