Central Govt to to establish Database of Independent Directors

The Union Minister of State for Ministry of Law, Justice and Corporate Affairs Shri P.P. Chaudhary: Independent Directors are watch persons of Corporate entities; Capacity development of Independent Directors is very essential since they play a crucial advisory role to ensure integrity and professional conduct in companies; Central Government is seriously considering to establish Database of Independent Directors.

The Union Minister of State for Ministry of Law, Justice and Corporate Affairs, Shri P.P. Chaudhary said that Independent Directors are watchpersons of Corporate entities. The MOS (Law, Justice and Corporate Affairs), Shri Chaudhary was delivering the Inaugural Address after inaugurating the two-day Orientation Programme for newly appointed Independent Directors of Public Sector Banks (PSBs) and Public Sector Undertakings (PSUs) at the campus of Indian Institute of Corporate Affairs (IICA) at Manesar in District Gurugram (Haryana) today. Addressing the newly appointed Independent Directors of PSBs and PSUs, Shri Chaudhary said, “It is high time to conduct such orientation programmes for Independent Directors (IDs) on a regular basis on various provisions, eventually leading to better accountability. The role of IICA is huge due to the large economic infrastructure in the country. He said that IDs impart balanced view along with transparency and credibility. The two most important functions of IDs are in advisory and monitoring capacity. They are systemically crucial in monitoring internal financial controls.” The MoS Shri Chaudhary appreciated the spirit behind organising the Conference aimed at capacity development of Independent Directors, since they play a crucial advisory role to ensure integrity and professional conduct in companies. Referring to the Section 150 of the Indian Companies Act, 2013, he shared the Central Government is seriously considering to develop a data base of Independent Directors at IICA.

On this occasion, Shri Gopal Krishan Agrawal, Member, Board of Governors, IICA, said that Independent Directors bring their experience of diverse fields to a company’s Board. However, appropriate knowledge and skills through such Capacity Development Programmes are vital. What is important is that the IDs have to set-up policy and systems.

Earlier, Shri Gyaneshawar Kumar Singh, Joint Secretary, MCA and DG & CEO, IICA welcomed the house and spoke on the crucial role of Independent Directors as independent advisors as they protect the shareholders’ interest. As such, IDs are institutions inside the Board. Therefore, the current initiative that aims at up-gradation of knowledge and skills of IDs will go a long way in strengthening corporate governance in the country.

Shri Madhhukar Gupta, Additional Secretary, Department of Public Enterprise, Govt. of India, highlighted the fact that the IDs have to contribute to the effective functioning of the Board and therefore, have crucial role and importance for the renewed focus on Corporate Governance.

Ms Vladislava Ryabota, Lead CG, IFC – World Bank, while referring to international best practices, underlined the need that the laws work effectively only if training and knowledge development accompany them.

Earlier, Dr Niraj Gupta, Head, School of Corporate Governance and Public Policy, IICA, welcomed the house. Vote of thanks was extended by Dr Naveen Sirohi, Head, School of Finance, IICA.

The Two day Orientation program will train 40 newly appointed IDs of PSBs and PSUs. The Program will have the presence of expert speakers and trainers from MCA, SEBI, Department of Public Enterprises, BSE, CII, IFC-world bank, UN Global Compact Network, GRI, International Integrated Reporting Council, Corporate sector, Banks, Media and Academia among others.