#BoardFailures

#BoardFailures - A special series on board governance in India on #BloombergQuint

“In India it’s less about board management and more about ‘managed’ boards.”

That's how a veteran lawyer describes the corporate governance fiascos of the last several months.

How did it come to this? India has top class corporate governance laws and regulations. In many cases (auditor rotation, independent director rotation) we've been ahead of the curve.

The laws don't need changing but a few other things do.

1. CULTURE

After all India's corporate governance regime is just two decades old.

2. Selection Of Independent Directors

Many boards continue to run like old boys clubs where camaraderie ranks high and dissent causes discomfort.

3. Shareholder Activism

In May when institutional shareholders of Fortis Healthcare moved a resolution to remove four independent directors from the board, it marked a first in India. Three quit. One was booted out.

4. Expectations

Independent Directors = Trusted Strategic Advisors OR Watchdogs?

5. Board Engagement

A random check on the duration of recent board meetings held to approve October-ended quarterly earnings suggests that members spend between 2-5 hours on deliberations.

6. Weak Enforcement

Read the letter the Federal Reserve Board wrote to the Lead Independent Director at Wells Fargo earlier this year. Can our (SEBI, RBI) regulators get tough too?

Read the full column here...