Financial Daily from THE HINDU group of publications
Saturday, Nov 26, 2005
Financial Daily from THE HINDU group of publications Saturday, Nov 26, 2005 |
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Regulatory Bodies & Rulings Corporate - Corporate Governance Professionals make a beeline for independent director posts Anil Sasi
New Delhi , Nov. 25 ENGINEERS, chartered accountants and graduates from foreign universities seem to be heading the list of professionals vying for independent director slots on the boards of listed companies. A large number of retired civil servants and former CPSU chiefs, lawyers and professors from institutions such as the IITs and IIMs are among those who have made themselves available for directorships for listed firms, most of which are running against time to comply with Securities and Exchange Board of India's listing agreement stipulating a higher presence of independent directors on company boards before December 31, 2005. All listed companies, upwards of 9,000 firms, are required to comply with Clause 49 norms, which mandates that at least 50 per cent of the board of directors of every listed company should consist of independent professionals, if the Chairman is also the Managing Director. If the Chairman's position is a non-executive one, then at least one-third of the board should consist of independent directors. An Institute of Chartered Accountants of India (ICAI) estimate puts the requirement of independent directors at around 15,000 professionals. If the 4,000-odd resumes received so far by Prime Directors — a corporate governance initiative developed by Prime Database and sponsored by the NSE and BSE — are sorted out into broad categories, engineers form the largest chunk, followed by chartered accountants and company secretaries. Prime Directors, which provides a platform both for professionals to enroll themselves and for the listed companies to reach them, has seen 1,290 applications from engineers, of which 358 are from the IITs. Over 1,200 chartered accountants have also sent in their resumes, while 500 company secretaries and 228 from cost accountants. Around 450 lawyers have also placed their resumes on the site. Others in the running include graduates from foreign universities, including Harvard, Wharton, Kellogg and Stanford, while a number of retired civil servants and IIM, IIT and IISc professors have also filed their resumes to be considered by listed firms. Interestingly, there are also 220 applicants who are already holding 353 independent directorships on listed companies. Besides the resumes that have come in so far, Prime Directors is also sifting through another 4,700-odd applications that it has received from prospective independent directors. The Corporate Governance Council of the ICAI which is working on an increased role of chartered accountants as independent directors in view of the Clause 49 stipulations, has arranged for training programmes for its members in mid-December in Chennai with the aim of "sharpening their competitive edge for these crucial jobs."
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