Brace for Digitally enabled Boards in future
Independent Directors must stand up before
Corporate Governance becomes DEAD
The storms we are going to face in coming years are going to be
SEVERER than anything we have seen before.
Only the true transparent have a chance to survive
New Delhi (India): In the face of recent scandals and frauds, the need for effective boards and the importance of Good Corporate Governance has further come into focus.
Recently, the Institute Of Directors (IOD), India organised its annual ‘Directors Conclave – 2018’ on 9th March in Mumbai (India). The Conclave debated some of the topical global issues & trends in Boardroom Governance. Some of the leading Directors who addressed included Mr. Ashishkumar Chauhan, MD & CEO, Bombay Stock Exchange | Mr. Leo Puri, Managing Director, UTI Asset Management Company | Mr. Shailesh Haribhakti, Chairman, DH Consultants | Mr. R. K. Mathur, Managing Director, Mahanagar Gas | Mr. Arun Balakrishnan, Board Director, HPCL-Mittal Energy | Mr. Nagaraj Garla, MD & CEO, IDBI Capital | Mr. Malay K. Patel, Board Director, HDFC Bank | Mr. Murali Neelakantan, Executive Director & Global General Counsel, Glenmark Pharmaceuticals, et al.
Some of the salient points that emerged from the Conclave include:
- India has improved a lot in overall rating in Corporate Governance in the last decade. It has moved from 1-2/10 to 7-8/ 10 on a rating scale.
- Regular Training is an important part of Board effectiveness.
- Strategic Direction – Important feature of the Board. All board members must have the ability to understand and analyse financial sheets to manage risk and crises.
- Distinction between a Company and Promoters. Companies need to operate at arm’s length with respect to expectations from shareholders.
- Corporate Governance is an important part of modern democracy. We have enough laws and regulations. There is a need for cultural and behavioural change for building transparency and accountability.
- Two T’s : Transparency & Trust will be two important parts of Governance.
- Internal Audit – arm of the Board. Helps Board’s directional policy and evaluating business strategy & efficiency. Special emphasis on Risk Management and Strategy.
- The standards of Board have changed over the years, mainly operational standards. But Directors have to have better engagement with the Board asking right questions, not being just cosmetic in nature.
- Use of Technology – need of the hour for Directors. They should also learn how to use it in their organisations to maintain SPEED. They must have an access to Company’s data to make their roles more effective.
- Evaluation of Board Performance. Focus areas & steps to make boards more effective. 3rd Party board review even for small companies. Boards must drive beyond ‘box ticking’ exercise, moving away from a rubber stamp to a leader.
- Do we have systems that can identify Risk in a company? Personal assets of Independent Directors are now at Risk as per new laws. Fraud monitoring committee should be formed in organisations and must meet quarterly.
- Conscious efforts needed to create Diversity, so as to induct women in the Boardroom.
- Crypto currency is the future. Japan has made it a legal tender and US has made it a digital asset.
The Conclave Report and also the last month report on ‘12th International Conference on Corporate Social Responsibility’ (Presenting Partner – DMCC | Principal Partner – Narayana Health) on 9-10 Feb 2018 in Bengaluru (India) can be viewed on the following link. Our Partner, India’s Prime TV News Channel – REPUBLIC. The text of the report has also been covered in March issue of ‘Director Today’.
Following this, shortly, some of the leading distinguished business and industry thought leaders will be assembling in Dubai as also sharing their insights and exploring how best to remain relevant and competitive, stimulate innovation and achieve the corporate responses that are required in this ‘Age of Disruption’.
Manoj K. Raut
CEO & Director
INSTITUTE OF DIRECTORS
M-56 A, Greater Kailash Part-II (Market), New Delhi – 110048, INDIA
Board Nos. : +91-11-41636294, 41636717, 41008704 , Fax : +91-11-41008705
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