The Industrial Credit & Investment Corporation of India (ICICI) has kick started corporate governance within the organisation and framed guidelines which, according to managing director and chief executive officer K V Kamath, may become the benchmark for corporates in which the financial institution has an exposure.
ICICI, the first to introduce corporate governance in the country, has demarcated the role of the board of directors and the executive management. The board will not be involved in approval of loans and other day-to-day operations, which will be looked after by a committee consisting only of working directors. The board will now focus on monitoring the performance of the FI.
To ensure the independence of the ICICI board, at least 75 per cent of the members will be non-executive directors who will have to commit at least 10-15 full days in a calendar year.
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Four committees have been set up for specific purposes: the management committee, nomination committee, compensation committee, audit committee and investment committee.
These measures are part of the code of corporate governance that will be practised by ICICI.
Under the new paradigm of corporate governance, the board is viewed as the centre of corporate governance and is responsible to all the constituents of the company _ be it the employees, the customers, the state or the investors, says Kamath.
According to the code enunciated by ICICI, the normal tenure of a non-working director will end after eight years or upon reaching the age of 70. The responsibilities of the board include approving budgets and plans, evaluating the performance, participating in formulation of strategic and business plans, formulating exposure limits and ensuring ethical behaviour and compliance with laws and regulations.
The board has the option of discharging its responsibilities through the special committees that have been set up. The management committee, consisting of the working directors and presided over by the managing director and the chief executive officer, will look after all day-to-day operations including loan approvals. The nomination committee will recommend candidates for filling vacancies in the
board, appoint and evaluate top management and evaluate the performance of the CEO and other board members. The compensation committee will recommend to the board the compensation packages payable to the members of the board including the working directors. The audit committee, consisting of non-working directors only, will review the internal audit reports, interact with the external auditors and ensure that the transactions are in accordance with laws and regulations. The investment committee will approve the basic policies governing investment and disinvestment, approve limits and periodically review transactions and monitor treasury operations.
Board reshuffle
ICICI has changed three of its directors and inducted fresh members into the board. The new board members are former Hindustan Lever chairman Ashok Ganguly, Sesha Sayee of Ashok Leyland and Indira Gandhi Institute pro vice chancellor Khurana.
Y H Malegam, a chartered accountant, Associated Cement Companies managing director S Ganguly and Suresh Krishna, chairman, Sunderam Clayton of the TVS group, have retired from the board.
The board strength continues to the 15 and the two additional board members have yet to be finalised. board, appoint and evaluate top management and evaluate the performance of the chief executive officer and other board members.
The compensation committee will recommend to the board
the compensation packages payable to the members of the board including the working directors.
The audit committee, consisting of non-working directors only, will review the internal audit reports, interact with the external auditors and ensure that the transactions are in accordance with laws and regulations.
The investment committee will approve the basic policies governing investment and disinvestment, approve limits and periodically review transactions and monitor treasury operations.
Board reshuffle
The Investment and Credit Corporation of India Ltd (ICICI) has changed three of its directors and inducted fresh members into the board.
The new board members are former Hindustan Lever chairman Ashok Ganguly, Sesha Sayee of Ashok Leyland and Indira Gandhi Institute pro vice chancellor Khurana.
Y H Malegam, a chartered accountant, Associated Cement Companies managing director S Ganguly and Suresh Krishna, chairman, Sunderam Clayton of the TVS group, have retired from the board.
The board strength continues to the 15 and the two additional board members have yet to be finalised.