New act would fix independent directors' role: Khurshid
Press Trust of India / New Delhi Aug 07, 2009, 18:57 IST
The government said today the role and responsibilities of independent directors on the boards of companies would be fixed as also the number of firms they could represent once the Companies Bill, 2009, became a law.
The role of independent directors came into sharp focus after the country's biggest corporate fraud at Satyam Computer Services early this year shook India Inc.
"We are in consultation with various stakeholders on what is an optimal number of boards each director should sit on. You (directors) should not just lend your name to a company, you need to know your role in a company," Corporate Affairs Minister Salman Khurshid told reporters at an Indian Chambers of Commerce summit here.
The bill, re-introduced in Parliament early this week, is looking at the entire structure of responsibility of independent directors. It also aims at protecting them so that they are not accused of the things they have not done.
The new bill provides more investigative power to the Serious Fraud Investigation Office. However, "there is no proposal for a separate act for SFIO right now," Khurshid said.
Necessary powers that are called for would be incorporated in the Companies Bill, Khurshid said.
As to speculations regarding stake sale by Larsen & Toubro in Satyam, the minister said it was no concern of the government.
"Satyam is an independent company and it can take any decision it wants," he said.
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