8th August 2019, Mumbai | Speaker : Sudha Ravi and Neera Saggi
The eighth Edition of Perspective a cxo round table panel discussion was held on 8th August 2019 at Hotel Grand Hyatt, Mumbai. The panel consisted of CEOs, Managing Directors, Directors, CHRO from companies of diverse industries. Once the introductions were concluded, the panel started the discussion on the opportunity of stepping on the boardroom as an independent director, creating awareness about one’s availability, the process, preparation and expectations. The esteemed speakers suggested that one should be answer some question to themselves viz. why do you want to be an independent director? Which industry to look for? Will you be able to allot the required time? Once these questions are answered accordingly networking with the board members and executive search firms is needed to create awareness about your interest in accepting your boardship. Once you receive an opportunity, you need to evaluate the roles and responsibilities as well as do due diligence about company.
Due Diligence is very important to safeguard one’s interest and peace of mind. Speak to the senior executives, promoters and other board members, current as well as past, study auditor’s report, and all other reports. Understanding the corporate culture, future plans will help you to take the decision.
Discussion moved on to another important topic; what is the role of an independent director? The position of an independent director is a statutory position created to ensure transparency in business operations and safeguard the interest of other stake holders of the company like employees, vendors, banks, Government and minority shareholders, etc. The Companies Act defines the roles and responsibilities and even the liabilities. However the role of an independent director would be directly related to the purpose of the company to appoint you as an independent director, as different to an executive director the role of an independent director would be more strategy and compliance, value addition and risk management. The performance of the board and performance of the company are totally distinct, the board strategizes, directs and evaluates, implementation rests with the executive team.
The responsibility of an independent director is much greater than just attending the quarterly board meets, your performance is directly related to the amount of time you are able to put in understanding the company’s business, the companies business performance vis-à-vis the competitors, financial statements and auditor’s report. Once you have all the requisite information you can pre inform the boards on things to be discussed in the board meet other than the regular business agenda.
While exiting the board one needs to be equally diligent in the reasons of the exit, neither the law nor the corporate world would be kind to you in case the reason to step down is not justifiable.
To conclude the position of an independent director is similar to an executive director in terms of corporate strategy and evaluation, and performance of the board. The law will be equally harsh in cases of omission and commission.