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Letter to BS: Govt needs effective ways to assess independent directors

As independent directors are appointed for their skills and expertise they bring to the table, an online test is an irrelevant exercise to determine their proficiency.

Business Standard 

Independent Directors
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The recent decision by the Ministry of Corporate Affairs to bring in certain exemptions for an online proficiency test held for is a welcome move. The mandate describes that any independent director with over 10 years of experience or a company having a paid-up capital of Rs 10 crore is exempted from taking the test. The ministry should also exempt proficiency tests for key managerial persons, including CS and CAs, who hold relevant skills and expertise in corporate and security laws. As most of the listed companies mandate a professional to undertake corporate secretarial matters, the exemption of such skilled professionals will ensure fair play and distinguish them from others. As are appointed for their skills and expertise they bring to the table, an online test is an irrelevant exercise to determine their proficiency.

The ministry should otherwise adopt innovative ways to test the proficiency of an individual through board familiarisation programmes, seminars, conferences, industry-oriented programmes and workshops and thus align the independent director appraisal process as per the current trends in the market.

Varun Dambal, Bangalore


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First Published: Tue, March 10 2020. 21:02 IST
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