Independent directors in the company play the role of representing the voice of the minority shareholders. But in the last 2-3 years, their situation has become like a ‘puzzle’. SEBI has noted that a number of independent directors have resigned as a result. If such resignation is a matter of administrative concern, then such directors should come forward and make the voice of the minority shareholders clear, said SEBI chairman Ajay Tyagi during a CII function.
He directed the directors to submit their reasons for resigning within seven days. Tyagi admitted that independent directors are becoming a puzzle. SEBI is trying to strengthen the entire system on this issue. There have been a number of frauds in Indian companies in the last few years and regulators are trying to further strengthen corporate governance standards. Attempts are being made on the extent to which they should be held accountable, how they can fit into the structure of the board, what people should be taken on the board as independent directors.
Industry conglomerates like CII, led by Uday Kotak, drafted the code on corporate governance. It can play an important role.
The industry should work with self-regulated, high standards. He recommended that investors as well as financial institutions should become more active in the voting process. Auditors, credit rating agencies, debenture trustees and proxy advisors also play a key role in maintaining improvements and standards. No improvements should be made radically. Not only sound education but his alertness and dedication too are most required.