Letter to BS: What were the independent directors of IL&FS board doing?

This refers to “Furniture in the board room” by Shyamal Majumdar (October 5). It is the most appropriate description. I have been an independent director after my retirement, for 11 years, in the corporate boards both as nominee of banks as well as in the capacity of knowing the persons at the helm of affairs. While I have found some retired officers mostly from the Indian Administrative Services who had at some stage favoured the company; there are others who are managing directors (MD) of other companies and therefore are friends of the chairman or managing director of the present company. 

Some independent directors are very knowledgeable as they had held important positions in commercial firms. But all of them are “nodders” (as described by the author) to whatever the chairman or the MD says. They care for the comfort of luxury stay in hotels and the remuneration as sitting fee that is pretty good presently. They also get a share of 1 per cent of the profit made by the company. They also care for the prestige that goes with such directorships. Some companies even give cash to their directors, which I know for certain. They are at sea to deal with directors who do not take such bundles of cash given in an envelope.

You have rightly named R C Bhargava, chairman of Maruti Suzuki. He has already announced that he will not resign from the Maruti board for not playing an effective role as independent director in the Infrastructure Leasing & Financial Services board. The government has 50 per cent share in Maruti Suzuki. So it can pressurise the Maruti board to make him step down. Even action should be taken against Michael Pinto, ex-secretary of shipping, whom also you have named as one of the ineffective independent directors. Only penal action that will tarnish their image will make the independent directors more responsible.

Sukumar Mukhopadhyay, New Delhi

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