The Hindu : Andhra Pradesh / Hyderabad News : Assess role of directors before appointing them, companies told

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Sunday, Aug 13, 2006

Andhra Pradesh

Andhra Pradesh - Hyderabad

Assess role of directors before appointing them, companies told

Staff Reporter

Corporate governance is a vital area for every company and it should be looked at as a much-needed value system, says SEBI chief

EXPERT ADVICE: M. Damodaran, SEBI chairman, T.V. Mohandas Pai, Director, Human Resources, Infosys, Franklin Allen, President, American Finance Association and T.J. Wong, Director, Centre for Institutions and Governance, Chinese University of Hong Kon g, at a meeting at the ISB in Hyderabad on Saturday. — Photo: Mohd. Yousuf

HYDERABAD: Chairman of Securities and Exchange Board of India (SEBI) M. Damodaran has reiterated his stance asking companies of all sizes to take a re-look at the process of taking directors on board.

Speaking at a conference on `Corporate Governance in Emerging Markets' at the Indian School of Business here on Saturday, he said the time had come for every director to be assessed as to his/her role in terms of quality and experience before taking them on board.

Mr. Damodaran said corporate governance (CG) was a vital area for every company and that it should be looked at as a much-needed value system, keeping the shareholders in mind. While the Cadbury's report of 15 years ago was the beginning of CG as a concept, he said Mahatma Gandhi's lines `ends do not justify the means' was in its own simple, effective way, apt for Indian companies.

There were no shortcuts to reach the goal he said, urging companies not to abandon the highway of moral responsibility.

While the `Anglo-Saxon protestant' value system was in vogue in most of the dominant markets, it would not work in Asian countries, said T.V. Mohandas Pai, Director, Human Resources, Infosys.

He said in a country like India the `dharma' system would work better.

Mr. Pai said regulation was required to accord proper treatment of minority shareholders and it was not right for companies to take the views of the dominant, family-oriented shareholders into consideration.

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