T.V. Mohandas Pai, who is a working director on the board of Infosys Technologies Ltd—a firm globally reckoned for its ethical ways—since May 2000, says, “To get quality people on the board as independent directors, companies must not only be willing to provide adequate compensation in line with market practices, but also fully empower them and put in place an efficient instititutional framework for them to work.”

But, most companies in India do not have a framework for independent directors. They want people who echo the promoter-director. Subir Raha, former chairman and managing director of state-owned oil and gas giant ONGC says, “Some independent directors on the board of public sector undertakings open their mouth only to sip tea.” And, it is just as well they do so. “They are just completely unfit,” he says. Raha was one of those public sector chiefs who took on his political boss, Mani Shankar Aiyar, who as petroleum minister in 2005, thrust on him a ‘political’ list of four independent directors.

A CEO of a Mumbai-headquartered public relations firm that has about 250 corporate clients says, “If the public sector is bad, the private sector is no good. Most independent directors are promoters’ men. Their job is to merely attend board meetings and sign documents. My dip-stick survey shows 60 per cent of independent directors in India are retired—by age, physically and mentally.” He cites the high-profile board of Jet Airways, India’s largest private airline that has Shah Rukh Khan, producer Yash Chopra and noted lyricist Javed Akhtar as independent directors. In fact, according to CMIE’s Prowess database, Khan has not attended a single board meeting since he came on board Jet in August 2006.

... contd.