The financial meltdown that shook the world was a direct outcome of mismanagement of risk. The risk management was completely ignored by companies’ boards. Boards did not even constitute risk committees and expected “inexperienced” audit committees to handle risk, according to president of World Council for Corporate Governance, Madhav Mehra.
Addressing a national conference on corporate governance, organised by the Institute of Directors, the apex association of corporate directors in India, Mehra emphasised the need to make boards transparent and accountable. “We don't need independent directors, we need directors of independent mind,” he said.
The two-conference, which began here on Friday, is aimed at unfolding a new principle-based approach to corporate governance, as opposed to traditional rule-driven approach. The theme of the conference is ‘Getting Real with Corporate Governance’.
Union minister of state for corporate affairs, Salman Kurshid, who was the chief guest at the event, said corporate governance should be essentially looked at from the point of view of democracy. Protection of the rights of minority shareholders should be its philosophy.
