Inaugurating the third Corporate Governance Summit of the CII at Mumbai on December 12, the Chairman of the SEBI, M. Damodaran, made some pertinent observations on the role of the directors on boards of companies. They sprang from the basic premise that, as he put it, "the boardroom is centre-stage to corporate governance" and the manner of their functioning can make a lot of difference to the company's performance.
There will be instant agreement with his proposition that directors should not just `grace' the board, or that they should not overstretch themselves by being on too many boards. Indisputably, a person is taken as a director, not for the sake of his eminence, but in the expectation that he would take deep and abiding interest in the affairs of the company and ensure that it lives up to the stake-holders' expectations in terms of accountability, transparency, social responsibility and return on investment.
As chairman of a few boards in my time, I used to notice with amusement, tinged with concern, that outside directors opened the agenda papers only on coming to the meeting, adlibbed agreeably on the spot on the issues raised, collected the sitting fees and departed.
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