But more than numbers, it is the nuances that are turning out to be policy challenges — who is an ‘independent director’, what is he expected to do, what is his authority and so on. Broadly, independent directors are expected to ensure that the interests of minority shareholders in listed companies — or depositors in the case of banks — are protected. They are expected to blow the whistle if any wrongdoing is spotted and raise the issue at AGMs, EGMs and other forums. In the case of public sector banks, they are supposed to raise these issues with the government. Not with the media, as two highly ambitious independent directors of PSB did. What stakes do they have, one wonders.

Indeed, what stakes do the 32 of 37 ‘non-official’ directors, as independent directors are known in the banking vocabulary, that the UPA administration has crammed public sector bank boards with, have? Why this great urge to stuff public sector bank boards with political appointees? What’s the rush to turn an office of responsibility into an office of personal profit? PSB is just one illustration of an attempted hijack. A trustee of millions of households, managing more than Rs 17,000 crore of deposits, is in the middle of a skirmish where the chairman has turned whistleblower — the first such instance I’ve seen. Again, ironically, it is independent directors that are expected to blow the whistle against the management. In this case they have — but with their facts and intent all wrong.

... contd.