Keeping Companies Above Board
The recent report of the Securities and Exchange Board of India (SEBI) appointed Uday Kotak Committee, alongside the two high profile corporate battles of the past year Ratan Tata versus Cyrus Mistry at Tata Sons in late 2016 and N.R. Narayana Murthy versus Vishal Sikka at Infosys in mid 2017 have turned the spotlight squarely on corporate governance and, in particular, the performance of company boards. There is no doubt that there exists much more transparency and stakeholder democracy in companies now than before, thanks mainly to the new Companies Act of 2013 as well as earlier rules set by SEBI in recent years.
SEBI has not only made regulations but also acted to enforce them. A well known instance was the case of Chennai headquartered IT company, Zylog Systems, which declared a dividend for its shareholders at its annual general meeting (AGM) on September 25, 2012, but failed to actually distribute it. Responding to complaints, SEBI, after due enquiry, barred the company from "buying, selling or dealing in securities in any manner whatsoever" and recommended action against the directors. But it also clarified the role of independent directors on boards by declaring, in a subsequent ruling, that the two independent directors should be spared, since they could
