WHEN ALL ABOARD ARE FLYING BLIND

THE IndiGo turbulence has again brought the issues of corporate governance and marquee boards into public discourse.

- R GOPALAKRISHNAN

This article, however, is not about the airline. It explores ways for directors to engage with business crises and issues. From having little or no understanding of this expression 30 years ago, everybody nowadays comments on the subject.Having served over 25 boards in five countries over the last 40 years, I realise that board directors should be among the earliest to pick up signals of misgovernance-though, not necessarily, proof). It is only thereafter that the matter likely leaks into the public domain, regulators, courts, and the due process of law. I have written earlier that "directors can be the first to hear the canary in the coalmine". They should not ignore the signals.

Though non-executive directors possess imperfect information, their work is expected to be effective, for which they have powers and resources. When untoward events occur, people realise that board directorship is no safe sinecure for retired professionals. Discharge of board duties requires sound experience, judgement, and deep intuition.

Non-executive directors can be imperfect individuals who work with incomplete information, but the public expectation from them is high. It remains that other than a competent, well-intentioned, alert, and united board of directors, no better corporate governance system has yet been invented. Let's delve into some examples of crisis management by Indian boards.