What follows is from the pages of corporate history. Directors, think OR blink and sink
WATCH OUT. POTHOLES AHEAD
The management of the subsidiary casually tells its Board about a fraud, 6 months after the fraud came to its knowledge. In turn, the parent Board’s AC gets to know of it after 7 months of the fraud.
The nominee of a parent company complains about the management in a subsidiary, but does not act on it in the meetings of the subsidiary.
The Chair of AC resigns shortly after the Internal auditor resigns.
The chair of AC refuses to sign the financials of the company.
Promoter MD receives and considers a proposal for merger, without bringing it to the Board. The proposal is rejected by the MD because it would dilute his shareholding as a promoter, but the proposal is good for the company.
A Proxy advisory firm issues adverse recommendations for all the resolutions.
The Board reads in the newspapers about a potential merger of the company that the management had considered, and rejected 6 months ago.
The Chair of AC resigns because he is not comfortable with the RPTs with the promoter group.
An institutional investor sends an open letter stating its discomfort with Corporate Governance practices in the company.