tag:blogger.com,1999:blog-4740849900073154554.post6291410523316950785..comments2023-08-25T17:30:36.937+05:30Comments on Business Musings: Independent Directors – Not good enoughRameshhttp://www.blogger.com/profile/11782192840421019943noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-4740849900073154554.post-48227731183886782032009-04-12T18:52:00.000+05:302009-04-12T18:52:00.000+05:30Wise words, especially coming from somebody who is...Wise words, especially coming from somebody who is an illustrious independent director himself. Thanks deeyes !Rameshhttps://www.blogger.com/profile/11782192840421019943noreply@blogger.comtag:blogger.com,1999:blog-4740849900073154554.post-63049083120767563422009-04-12T15:19:00.000+05:302009-04-12T15:19:00.000+05:30There should be a legal recognition that the role ...There should be a legal recognition that the role of independent directors is different from the executive ones.They should also ensure that top leader is always subordinated to the instituion and does not become bigger than the co. he/she serves eg.Madoff or Raju.They should ask /probe diligently to understand patterns of performance.governance need not suffer because of emloyee ownership or promoter stakes as Prince avers.Independent Directors should take these on board.deeyesAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-4740849900073154554.post-86325827194933605722009-02-09T14:57:00.000+05:302009-02-09T14:57:00.000+05:30Thanks Prince for bringing out the dimesion of man...Thanks Prince for bringing out the dimesion of managerial ownership as a threat to good governance. Do share your take on integrity - as an expert on corporate governance, your's is a valued view.Rameshhttps://www.blogger.com/profile/11782192840421019943noreply@blogger.comtag:blogger.com,1999:blog-4740849900073154554.post-20084170104761486262009-02-09T13:59:00.001+05:302009-02-09T13:59:00.001+05:30A comparative study of the published accounts of 5...A comparative study of the published accounts of 50 top corporates on the stated role of their audit committees would lead the shareholder to conclude that oversight on the Board is well controlled. However, I believe that any oversight role in this country is as unacceptable as audit has proved to be. This mindsight will need a "purgatory" before the role can be embedded in the process. Meanwhile, the core checks and balances needed are worth a debate. Who is an independent director when he is voted to office? How can independence be preserved in the process? I dont believe that remuneration is the key; rather, in my experience, it was the advent of managerial ownership that spelt the end of a true and fair presentation? Many of the significant scandals we see today have one or the other of following two characteristics. A promoter owner who finally goes public for the money for good reason and has not reconciled to even marginally be accountable to the new partners. Consequently, given the low or diverse profile of the new partners, the promoters continue their old ways, except now with a professional multi media presentation of the business for the public at large and the other owners. The new partners are carried away as seen from rising PE multiples, which defy financial gravity. And then there is a downturn/ a burst bubble and you can guess who would have already run down their holdings. The other emerging characteristic of this new malaise is professional management which has an increasing equity stake in the company. Given the importance of "performance" in sustaining earnings (at least till the maturity of options), the quasi owners keep the bad news off the public as long as possible. When it happens, we all hear the large slash at the short end of the pool. It cant happen with a professional management in place but it does with an interested management. A debate on these two issues would facilitate bringing in balances in the syatem. For a start, what oversight needs as Ramesh points out, is competence. This is generally available at a price. More importantly, it requires integrity, which is more scarce in our "benami oriented" system, but still exists. How is integrity to be realistically nurtured in the corporate world? I have a take on this but will defer writing till I have read many more views.Anonymoushttps://www.blogger.com/profile/14648641979305569333noreply@blogger.comtag:blogger.com,1999:blog-4740849900073154554.post-78121705783595517692009-02-09T13:59:00.000+05:302009-02-09T13:59:00.000+05:30This comment has been removed by the author.Anonymoushttps://www.blogger.com/profile/14648641979305569333noreply@blogger.com