'95% independent dir feel roles not clearly defined at appt'

Around 95 per cent of independent directors on boards of various companies do not have their roles clearly defined at the time of appointment, says a study.
While 50 per cent of the independent directors surveyed felt that their roles and responsibilities were not defined in the appointment letter, a whopping 95 per cent of them said their work load was not mentioned in the letter, according to India Board Report, 2015-16.
The Companies Act, 2013, prescribes a code of conduct and other duties for independent directors. This code places a significant onus on independent directors to assist in safeguarding the legitimate interest of the company and its stakeholders.

The study covers the boards of over 500 companies comprising a representative set of Indian, MNC and public sector companies. It has been prepared by a talent and board advisory firm, Hunt Partners in partnership with law firms AZB Partners and PwC India.
"The report does indicate that corporate governance in India has still some distance to cover," Hunt Partners managing partner Sunit Mehra said.
"The regulatory framework has more teeth and better clarity, the advent of the new Companies Act, 2013 calls for Indian corporate governance standards to be at par with the best worldwide," he added.

The report said that MNCs had the oldest board (66-plus years) while the average board of BSE 200 companies was the youngest (57-plus years).

Ex-CXOs or executive management (93 per cent) and bureaucrats (90 per cent) currently dominate the boards, while a majority (around 50 per cent) of surveyed independent directors were in favor of hiring younger and additionally qualified board members, it said.
Around 40 per cent of the surveyed firms indicated an average tenure of five years, it added.