Page 28 - Life Insurance Today July - December 2020

knowledge based on national/global environment 8. Not to make secret profits and make good loss, if
to guide the company). accrued due to breach of duty, of negligence.

b. Structural and Portfolio Strategy (Taking decisions 9. Not to exercise powers for a collateral purpose.
regarding structure of the co. and the business it 10. Not to waste company assets.
should enter into).
c. Implementation Strategy (To decide whether the Responsibilities & Liabilities of Directors
strategies are feasible and to implement such
policies and strategies properly). now Enstrusted for:
The Director's responsibilities include also-
To make policies/strategies which cover all functional areas 1. Responsibilities to shareholders (Through policies and
like marketing, finance, operations, customer relations and proceedings and monitoring top management's
R&D and monitoring and Supervisory Role to ensure right performance)
strategic direction are included in the strategic role of 2. Obligation to maintain honesty and integrity.
directors.
3. To give the shareholders regular reports and accounts,
besides being honest with the shareholders in their
Functions of directors as assigned in
dealings and decisions that will benefit the
these Insurance Companies: organization.
The directors are now assigned strategically for:
Invariably the following issues interests for the
1. To take responsibility for the performance of Co.
Director's explanation -
2. To promote interests of shareholders.
1. Misrepresentations in offer documentations and annual
3. To oversee performance of Co. & top managers. accounts
4. To see accurate reports on financial performance are 2. Failure to refund subscription monies to investors
provided to stakeholders.
3. Contravention of Law
5. To provide adequate strategic guidance to the Co.
6. To maintain good relations with the stakeholders. Important IRDAI Guidelines for
7. To enact various performance and conformance roles. Corporate Governance for the insurers:

Reference: IRDA/F&A/GDL/CG/100/05/2016 Dated: 18th
Duties of Directors are Invariably May, 2016 is establishing that the Corporate Governance
Enhanced: framework should clearly define the roles and
responsibilities and accountability within an organization
Directors enhanced duty requirement now
with built-in checks and balances. The importance of
encompasses the followings issues: Corporate Governance has received emphasis in recent
1. Exercise care in the discharge of functions as directors. times since poor governance and weak internal controls
2. Attend board meetings & pay attention to co.'s affairs. have been associated with major corporate failures in India.
Corporate governance has a different dimension as far as
3. Not to be negligent and not commit legal wrongs.
the insurance business is concerned.
4. Act in the best interests of Co. & stockholders/
customers. On the one hand, insurers have to be prudent in protecting
the policyholders' interests as regards reasonableness in
5. Not to misuse power.
charging premiums; objectivity in settling the claims and
6. Protect interests of creditors.
so on. On the other, they also have the responsibility of
7. Maintain confidentiality. profitably investing the policyholders' funds. This demands

"Relationships are like glass, complacent when cherished and irreplaceable once trampled on. It is advisable to let the
broken glass be than hurt yourself trying to put it back together."

28 July - December 2020 Life Insurance Today