Independent board key to good corporate governance: expert

Chennai:

As the contours of business is changing rapidly, corporate governance has undergone changes and experts urged the boards of the companies to effectively implement good governance at corporate level.

During a conference organized by Institute of Directors and Federation of Indian Chambers of Commerce and Industry (FICCI) here on Friday, R Raghavendra Rao, chairman and managing director of Orchid Chemicals highlighted the need for board members who are independent in views, thoughts and action to improve the corporate governance.

He also suggested the need for having diverse think tanks on the board besides including people from different fields. He said the board should be independent from the family and it should not be compromised on issues.

Rao also stressed on the need for whistleblowers like in West who are not afraid of asking the right questions. “The board should encourage such culture,” he said.

J Chandramouli, convenor, finance and taxation panel, FICCI said that with industry worldwide experiencing transformation, corporate leaders have been compelled to transform their organizations based on a new business agenda.

He said that the role of directors who are at the center of governance is evolving and is in greater focus in the recent past due to scams that rocked the corporate world, the resultant media glare and the evident downturn in the economy in most geographies.

President of IOD, Lt Gen J S Ahluwalia highlighted the achievements of IOD. The delegates also discussed about the Companies Bill and the role of the board of directors.

Later talking to reporters about Orchid Chemicals, Rao said that the company would continue with its plans to enter new therapeutic segments including oncology, ophthalmology and immunosuppressants. He also said that Orchid has received all the no objection certificates (NOCs) from the lenders to complete its $200 million deal with US-based Hospira. With the money from the deal coming in, the company expects to repay around Rs 800 crore debt out of the total of around Rs 2,200 crore this financial year, he added