This refers to the insightful article “Independent directors - unplugged” by Bhupesh Bhandari (March 25). Who should determine the appointment, remuneration and performance of the independent directors? So far it is the company, which implies the promoters. However, if we acknowledge the interests of other stakeholders from a policy, and not merely academic, point of view, then the decision on independent directors must rest outside the company. This would be a paradigm shift in thinking which is long overdue.
Also, people who dissent do not rise, not in a corporate hierarchy at least. Such independent people are filtered out of the system.
But among the examples of failed independent directors, the article does not mention the case of the Dean, London School of Business who is also Chairman of England’s policy-making auditing body. Besides, he serves as Director on the board of Barclays apart from writing exemplary articles in Harvard Business Review. It is because of his last role that I learnt about the breadth of his knowledge. And then comes the news that the creditors of Lehman have sued Barclays for buying $50 billion of Lehman assets for $45 billion by inducing Lehman executives and all this happened before the bankruptcy court.
So I sent him an email, marvelled at his ability to hold forth on ethics and corporate governance at the B-school, laying the boundaries of accounting and audit liberties and positing fielders to prevent leakages, at the same time sharing his experience with the world through his writings while guiding his Board and company on the practical side of business. He replied that he did not accept the underlying insinuations in my mail.
What he meant was that it was “all in a day’s work”.
Hari Parmeshwar, on email
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