Experts pitch for a checklist for company directors

Experts have called upon the Confederation of Industries and Institute of Chartered Accountants of India to recommend and suggest guidelines, serving as a check list for professional directors ahead of the new Companies Act.

They emphasised it in a seminar on Strategies of Protecting Directors organised by CII in association with Raheja QBE General Insurance Company Ltd and Baroda Branch of WIRC of ICAI at a hotel here yesterday, which saw directors from various companies across the state attending the event.

The session was organised in the backdrop of upcoming new Companies Act which is touted to have very strong provisions for both executive and independent directors, said Nitin Mankad, chairman, CII Central Gujarat Zonal Council.

Speaking on the occasion, Bimal Bhatt, a noted corporate governance expert outlined a set of directorship checklist that can be used as a standard yardstick by directors of various companies.

While the focus of discussion was on the theme of various risks and liabilities faced by executive and non-executive directors of all types of companies, it became very clear that

there is a need for increased understanding and mitigation of risks faced by executives in decision making position.

"Today many of the directors (of a board) do not realise that a small action of omission or commission can lead to serious financial and moral complication," said Kiran Kumar head-liability underwriter, Raheja QBE especially for the independent director who are on multiple boards.

"Corporate governance is going to be the corner stone of the upcoming New Companies Act and directors vote is going to be pivotal in affecting effecting corporate governance practices within the organisations, said Mankad, managing director, Innovative Tyres and Tubes Ltd.

From that perspective directors and organisation own understanding and clarity of liabilities will go a long way is ensuring a strong corporance governance practices across the board, he said.