CorporateMOM,
Corporate Management Orbiter Mission.
Podcast Episode #71 Strengthen the Independent Directors
mp3Audio : The Board – Committees – LODR
Video
pdf for Download:
Measuring Corporate Governance
Strengthen the Independent Directors
In continuation of my mission to establish ICGI – Institute of Corporate Governance of India [As a Statutory Body under an Act of Parliament] I am presenting here the first part of the series:
CREAM Report,
M, Management Quality – The Board of Directors – Committees – SEBI – LODR 17-27
Some of the Critical Control Points I would like SEBI to address:
1. Chapter IV states: “a listed entity having paid up equity share capital not exceeding rupees ten crore and net worth not exceeding rupees twenty five crore, para C , D and E of Schedule V shall not apply.” Why?
2. Governance is a dynamic function
The Board of Directors and the Committees function on an ex post facto principle. Cases such as Piramal Capital Ex-MD Khushru Jijina, Anil Ambani being banned from the securities market, the colo facility to TMs in NSE co-location Inquiry have clearly shown the ineffectiveness of an Audit Committee in an organization.
3. Role of CRAs:
By Dr. Veerappa Moily Standing Committee Report: The Committee noted on the Regulatory Framework that CRAs have progressed from rating simple debt products to complex debt structures, covering a wide range of products and services like securities, bank loans, commercial papers, and fixed deposits, but questioned the role of CRAs in overrating the entities.. Hence, LODR – Chapter IV should look into the capability of credit rating agencies in rating these instruments.
SEBI should seriously look into why Accountability remains a daydream and that ex-post-facto punishment is too late syndrome. Mere compliance certificate by Part B Schedule II is not sufficient. SEBI must look into strengthening the position of the Independent Directors very greatly ASAP.
The Board of Directors LODR 17 – 27 and Committees LODR 17 – 27 Analytics with Index of Inactivity by Process Area and Index of Inactivity by Resource Area for each is presented here.
Regards,
Jayaraman
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