While it is generally assumed that Boards exist to add value, they can be value-adding, value-neutral or value-destroying. There are several reasons which could make Boards value-destroying. Some of these are Lack of trust – When Board members do not trust one another, there is no free and frank discussion in the boardroom. This hampers....
Effective risk management systems are crucial for companies, irrespective of their size and sector/ industry. These alone can help mitigate potential losses and protect the company from the adverse impact of unexpected events. Risk management involves identifying, assessing, and prioritizing risks, and implementing strategies to mitigate them. Risks are a daily occurrence in most businesses.....
In recent times, the concept of boardroom diversity has gained significant momentum in India and in the rest of the world. Unfortunately, the law in India currently focusses only on gender as an indicator of diversity. Gender Diversity It is the form of diversity that has been identified by most countries, including India. Internationally, a....
Managers are senior persons, who are empowered to take decisions for the smooth functioning of a company. At the same time, they are accountable for their actions. However, overconfidence and decisions, not backed by sound reasons, could result in risks with potentially disastrous consequences for the company. Financial resources are very important for every company.....
For any company, there are two categories of stakeholders: internal and external. Internal stakeholders comprise employees, owners and shareholders, Board, investors and the like. They usually have a direct interest in the company, and this is usually through employment, ownership or investment. Some of them could have an influence over the decisions of the company....
Diversity means having a variety of persons, belonging to different genders, various age brackets, different ethnicities or socioeconomic and cultural backgrounds. It could also mean diversity of skills, experiences and interests. Equity means creating impartial and fair access, treatment, and opportunities to every person. Inclusion means being included within a structure or a group. Diversity....
Corporate misdemeanours, especially at the Board and top management level have highlighted the need for building good Corporate Governance culture and practices within a company. With each such failure, stakeholders suffer considerably, and there is severe reputational damage for the company, and sometimes for the industry/ sector in which it operates. The Board of Directors....
Board of Directors is a group of individuals responsible inter alia for taking strategic decisions for a company. Since the future of any company depends on the decisions of the Board, it is imperative that the Board is effective. An effective Board is one which has role clarity, and one which works collectively for the....
Succession planning is the process to identify and develop future leaders in an organization, and moving the identified persons to positions of leadership, once the need arises. Succession planning ensures that a business continues to run smoothly, and without any disruption. Stated differently, succession planning is the process of developing and training persons to replace....
The independence of a Director is critical to ensure objective thinking, discussions and decision-making in the boardroom. The Companies Act, 2013 (the Act) and SEBI LODR Regulations, 2015 (LODR) have indicated some criteria for assessing the independence of an ID. Independence however is a state of mind, and cannot be determined with reference to statutory....