10 Commandments for Independent Directors
By V V Ranganathan, Former Senior Partner at a Global Firm
It may be a matter of comfort to directors that the conviction levels in India is poor, compared to (say) the US. But the implications of Clause 49 for the board of directors are diverse and explicit, and directors have personal accountability for violations of the law.
The 10 commandments of risk management for directors:
1. Question whether it is a company that you really want to work with;
2. Question whether you have the equipment and knowledge to meet the expectations of the company and its regulators, without assuming disproportionate risks;
3. Demonstrate that you are independent, as stipulated by law;
4. Enquire whether the company has developed formal control and oversight procedures, and determine whether you can rely on them;
5. Resist unreasonable pressures and maintain objectivity;
6. Keep yourself up-to-date on the subject matters where you are expected to contribute to board deliberations;
7. Obtain copies of the Code of Conduct and ensure that you can abide by it;
8. If you are in doubt, always seek professional help from experts;
9. Always demand all board-related papers well in advance, to prepare for board meetings;
10. Keep all company-related information strictly confidential
Click here to see a podcast on 10 Commandments for Company Directors.