Jan 27, 2004

How can a director be independent, industry can't figure

The Economic Times news item says :

"The debate over independence of directors refuses to die down. The industry which has been opposed to the proposal requiring at least 50% of the directors on the boards to be independent, now say, there is no such thing as an ‘independent’ director.
All directors are dependent and hold office at the pleasure of those appointing them — be it promoters who hold majority shares or financial institutions that have outstanding loans or equity in the company. The industry wants the proposal on majority for independent directors in the board rooms to be only recommendatory in nature rather than mandatory. It may be recalled that the now-withdrawn Companies Bill 2003 and Sebi mandated amendment to clause 49 of the Listing Agreement of the Stock Exchanges required majority board seats for independent directors. "

Well, this one will take a long time to settle down - Gautam ;-)