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'Paper'ing over the cracks - Part 2

Shareholders who expect value from IDs should ask Boards and managements whether the compensation presently given to IDs is adequate, having regard to their role

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M Damodaran
The constituency of the independent director (ID) is vast and varied. When appointing an ID, what should shareholders look for?

Sebi’s Paper on IDs proposes that the skills and capabilities required for the appointment of ID, and the manner in which the proposed individual meets the requirement of the Board, should be disclosed to the shareholders prior to the appointment. Also to be disclosed is the channel used for searching for the appropriate candidates. What shareholders should be more concerned with is the number of Boards on which the proposed candidate already serves, and whether he/she would be able to devote
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper

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