Independent Directors
- outsiders/non executive directors of a company
- appt. in public copmanies
- resp. of protecting interest of minority shareholders
Functions
- safeguard corp values: transparency, acc
- ensuring objective evaluation of performance of board of directiors
- safegurad interest of all stakeholders
- determining appropriate level of remuneration for executive directors, snr mgmt
- ensuring integrity of financial information so that fruad & corruption can be prevented
Challenges in Corporate Governance
- ensuring consistent enforcement of governance norms & compliance by all companies
- instilling ethical values in org => long term challenge
- req. ongoing effort, commitment at all levels
- protecting interest of minority shareholders against dominant influence of promoters & major shareholders
- many time, decisions taken based on promoter/majority holder’s interests
- global corporate governance standards continue to evolve, so India regulations need to keep pace and remain aligned
Reforms required to overcome challenge wrt corp. governance
- inc awaranesse, understanding of corp gov principles, capacity building
- foster culture of ethics, integity, ethical leadership, value based decision making
- greater focus on env, soc, gov
- utilising tech to improve gov practices
- regularly updating regulations to reflect changing business env, & intl. gov trends
- eg. Regular meetings of corp. entities & gov
Corporate Social Responsibility
see PPT
Concerns
- lopsided CSR
- 85% on health, edu, livelihood
- large part in western/southern parts of india
- CSR viewed as mere compliance req.
- designed w/o adequate consultation w/ local communities
- some companies perceive CSR as tool to enhance their public image w/o genuine concerns for social / env obj
- channeling CSR funds to their own NGO
- lack of adequate mechanism to monitor & evaluate impact of CSR