Page 22 - Sept-2020-Issue

ARTICLE

Balancing Skills

on the Board of Directors

Inderpal Singh
Former Company Secretary
BHEL

lbert Einstein had said Balanced Board skills: business environment, the board
that “the significant pivotal to success of of directors should have a bal-
Aproblems we face today companies anced mix of skill-sets, compe-
cannot be solved with the same The Board is the highest decision- tence and expertise to steer the
level of thinking we were at making body in the company company towards success.
when we created them.” Last management and consists of a Relevance of Skill assessment
few years have witnessed sig- set of leaders (directors) which for Performance Evaluation and
nificant developments in the sets the vision of the company, Succession Planning: Performa-
business and economic environ- designs a strategy to deliver it nce evaluation of board and its
ment in India viz., rapid pace of and guide & directs executive directors and proper succession
globalization, increase in scale management to achieve the de- planning for appointment of
and complexity of business op- sired performance goals. To this Board members are critical for
erations, rise in foreign invest- end, the Board must ensure that it promoting good governance and
ments, more enlightened invest- possesses necessary mix of skills, long-term success of the orga-
ment community and frequent experience and expertise to func- nization. Listing Regulations as
regulatory changes to cope up tion effectively and efficiently. well as Companies Act mandates
with the demands of enhancing Protection of Investors funds performance evaluation of board
the standards of corporate gover- and Value creation: In January, & directors and formation of a
nance due to these developments. 2020, India ranked tenth largest Nomination and Remuneration
These changes also demand high- World Stock Market with a mar- Committee (NRC) in this re-
er quality of governance from ket capitalization of over $ 2 tril- gard. Further, Regulation 17 (4)
the Board of Directors of Indian lion. Considering the objective of requires the board of directors
Companies to promote rights value creation for shareholders, to satisfy itself that plans are in
of shareholders, ensure long protection of funds of banks, fi- place for orderly succession for
term value creation and to fulfil nancial institutions & other credi- appointment to the board of di-
statutory duties. tors and the complex & dynamic rectors. However, while carrying

* Mr. Inderpal Singh is an Associate Member of the Institute of Company Secretaries as well as Institute of Cost Accountants
of India.

Disclaimer
The Views expressed in the article are those of the author and do not necessarily reflect the opinion of the company or
any other Govt. agency.

22 KaleidOscope September, 2020