Freeing Company Boards

Provisions seeking independence of board members have been tightened. Can the companies catch up?

- E. KUMAR SHARMA

It seems like an exodus. In just six months of FY 2020 – April to September – 826 independent directors ceased to be directors, among all NSE-listed companies, as against 922 in the whole of previous fiscal (FY19). Of that, 128 cited pre-occupation; 83 personal reasons; 86 were not interested; 92 did not give any reason; and 49 said they were complying with the Companies Act and Securities and Exchange Board of India (Sebi) regulations. The numbers are from the NSEInfobase. Experts in the field believe perhaps some of it has to do with the developments in the recent past. This includes default of Infrastructure Leasing & Financial Services which led to a crisis in the NBFC sector and the bid for renewal of Rana Kapoor’s tenure at Yes Bank. The role of independent directors had come under the spotlight in both the cases.