A question of independence

Tatas should have treated independent directors better

If the battle between Ratan Tata and Cyrus Mistry has revealed anything about corporate governance practices in India, it is how promoters really view the role of independent directors on the boards of the companies they control. The manner in which the Tatas criticised group firms’ independent directors such as Deepak Parekh, Nadir Godrej and Keki Dadiseth, who are among the most-respected names in the corporate world, is a case in point. Over the past couple of weeks, they were among several prominent independent directors on the boards of major Tata group companies that expressed confidence in Mr Mistry’s stewardship and voted for him to continue as chairman of those companies. But instead of respecting their stand, Tata Sons chose to question their integrity by suggesting, in the case of Indian Hotels, that Mr Mistry had ganged up with them to gain control of the company. It also accused Nusli Wadia of galvanising independent directors of a few other firms.

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