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Corporate governance, Exide style

Santanu Sanyal

KOLKATA, July 25

EXIDE Industries Ltd's record of corporate governance, as contained in the company's annual report for 2000-01, is quite revealing.

The report starts with the pious wishes of the management. There are references to effective structures, core roles of key entities flowing from the structures, proper processes and practices and the like, all prerequisites of successful corporate govern ance.

So far so good. However, when it comes to board meetings and attendance, one gets the impression that what is preached is not always practised, at least by the key person in the organisation.

It is common knowledge that Mr R.B. Raheja is the effective owner of Exide. From the company's annual report, one learns that he is the Vice-Chairman of the company and a non-executive director.

In 2000-01, the company, as per its corporate governance policy, held as many as six board meetings. Mr Raheja attended only two of them.

The attendance record of other non-executive directors too is nothing to write home about. On a 15-member board, there are as many as 10 non-executive directors. Six of them attended two board meetings each, one of them only one meeting and another three meetings.

The sole exception was a Kolkata-based veteran who attended as many as five board meetings. One non-executive director did not attend any meeting at all, presumably because he was inducted on the board recently.

Did any of the non-executive directors attend last year's AGM ? None, except one (again the same Kolkata-based old horse).

Did the non-executive directors attend the company's AGM held on Monday?. Yes, three of them, out of a total of 10. Except the Kolkata-based veteran, two others had reasons to attend the meeting. There were resolutions relating to the appointment of one of them and reappointment of the other.

Did Mr Raheja attend the AGM? No. He never attends. Referring to Mr Raheja's knack for skipping AGMs ever since he took over the reins of Exide, one shareholder wanted know at Monday's AGM whether it would be proper for him to stay on in the board withou t attending any of the important meetings.

Most of the Exide non-executive directors also hold directorships in several other companies. Mr R.B. Raheja himself is on the board of nine other companies. One non-executive director is on the board of as many as 15 other companies. As compared to thes e companies, Exide, to them, must be a lesser corporate entity. At least, so it appears.