IICA plans orientation course for independent directors

NEW DELHI: The Indian Institute of Corporate Affairs is developing a orientation programme aimed at sensitising independent directors about their significant role in the decision making of companies.

The move comes against the backdrop of the new Companies Bill, which is awaiting Rajya Sabha nod, having provisions that ensure independent directors have more responsibility in discharging their duties.

"Role and the positioning of the independent director will become almost essential in the way corporate governance will happen in India and even the character of the independent director will substantially change," IICA Director General and Chief Executive Officer Bhaskar Chatterjee told PTI.

In this context, IICA is a developing a curriculum for the orientation programme of independent directors.

IICA comes under the Corporate Affairs Ministry. Speaking on the sidelines of an event organised by industry body Assocham here, Chatterjee said that independent directors need only "orientation" and not training.

"What is the new role in the changed environment, what is the expectation of their performance, what are they supposed to do in board meetings... all these issues will be addressed with the curriculum," he said.

IICA is in the process of developing the curriculum. "...we want to engage the best companies from the whole spectrum of the smaller, the medium and the larger ones," Chatterjee said.

Plans are to have the curriculum tailored in such a way that independent directors would be required to spend almost a day under the orientation programme.

Addressing the Assocham event on 'Corporate Compliance Management', Chatterjee said that new companies bill has included in a compressed form most of the best practices of the world that would make sense to corporate India.

He further said that "cost of compliance must lie at the heart of every entity as they can derive a lot of value through it".

"If you have not budgeted for compliance you have committed a serious mistake because if you are not able to comply well and slip up then costs and penalties are way too high...," he added.

Speaking on the occasion, Planning Commission member Arun Maira said that rapidly declining trust of citizens in the political, government and corporate institutions is leading to logjam in the country.

"This logjam is not just going on in the parliament but in our districts where actions are not being taken and where the agreements and alignments between the industries and governments are not happening rapidly," he said.