If the ministry of corporate affairs has its way,independent directors in the country may soon see themselves in classrooms before they get into board rooms. The ministry is working on a proposal to develop a training module for independent directors to provide them a snap course on corporate governance and their role in the company. Currently,no institute provides formal training to independent directors.
After the passage of the Companies Bill,2012,the number of independent directors in the country is likely to swell up to 2 lakh from the current demand of around 40,000 directors. The Bill says every listed public company must have at least one-third of the total number of directors as independent directors,a government source said.
…we dont have trained independent directors to bring quality governance to the companies. The idea is to have a training,educational module. This will be done through the Indian Institute of Corporate Affairs (IICA), the source said.
In 2004,the Confederation of Indian Industry had conducted trainings for independent directors. Later in 2005,the Institute of Chartered Accountants of India had also conducted a few programmes to train them. However,any such education on the government level has never been undertaken.
The idea is to help transform corporate governance from a tick-box exercise to an actual roadmap, the source said.
Independent directors have been the focus of discussions in all corporate governance debates after the accounting fraud committed in erstwhile Satyam Computers came to light in 2009. Concerned over the important role they play in a company,the government has laid down responsibilities of independent directors in the new companies legislation to clearly demarcate their role in a company.