Three years earlier, Prashant Saran, wholetime member at the Securities and Exchange Board of India (Sebi), made one of the most interesting speeches by a regulator at Future of Financial Markets (FOFM), the spectacular jamboree Jignesh Shah used to put together each year.
This column wrote about it --- Worries of an incorrgble optimist, and the well-written speech was such a hit that it was soon put on the Sebi website, too-- Detailed speech
That Saran was speaking was an incentive to drag oneself on a Saturday morning to a seminar that threatened to bore terribly with its title, ‘Board evaluation — purpose and process’. He did not disappoint. While the self-deprecating humour was intact, the delivery had become smoother with the confidence that comes from practice. Starting with his customary disclaimer about how his views should not be construed as of the regulator, Saran quipped, “What is a regulator without a disclaimer?”, loosening up the audience of company secretaries, organised by their institute’s Northern India Regional Council.
He went on to recall an incident from his life to demonstrate how there could be a generation gap in perception of the concept of evaluation. Once Saran was nominated for a premier forex training program and there was a discussion in the family about handling his absence for three weeks. Saran’s father, who was visiting, was incensed and asked, “What kind of person you are? Even at 40, you need to be trained?”
Similarly, though the present generation of board members gets offended at the mention of evaluation, that would change over the years, the regulator said.
He then took a futuristic dive, saying one approach for the board could be to work the way Google Car operated. A Google Car navigates itself by collecting huge amounts of data through censors and GPS, and evaluates all the hurdles that come in the way of its goal. Similarly, a board should see whether what it is doing is taking the company towards its goal.
For the next important point, Saran borrowed from Lewis Carroll’s evergreen Alice in Wonderland. “Would you tell me, please, which way I ought to go from here?” Alice asked the Cheshire cat. “That depends a good deal on where you want to get to,” replied the cat. Boards should be clear on where they want to go, Saran said.
Former Sebi chief M Damodaran, who spoke after Saran, said he would have been happy to have him as a colleague, regretting his own term had ended before the latter joined Sebi. Damodaran didn't pull punches on his pet hate, the new Companies Act, which he termed a joke. Picking on Saran’s reference to Alice, the former IAS officer said, “You wanted to take people to heaven but paved a path that took everyone straight to hell.” Being a consultant and member of many boards himself, the former regulator also added to Saran’s point on how one should be careful while hiring consultants.
Saran said there were two ways using consultants. One was the lazy way of hiring them to only tick the boxes. The other way to use a consultant is the way Bollywood star Aamir Khan uses his physical trainer, Mickey Mehta. Before each film, Khan decides how he wants to look for the particular role — whether to beef-up like in Ghajni or look like a college student. He then seeks Mehta’s help in achieving that look. Saran asked boards to learn from Aamir Khan because, “We all want to make an excellent film at the end of it.”
