Independent directors cannot be on the board of 20 or 30 firms as they have to protect the interests of stakeholders in the board room, Union Minister of State for Corporate Affairs Salman Khurshid said on Wednesday.
Inaugurating the second edition of ‘India Corporate Week 2010,' organised by the Ministry of Corporate Affairs and Madras Chamber of Commerce and Industry (MCCI), he said that the number of companies (public, non-public or private) in which they could be independent directors should be limited as they had a larger role to play in the board rooms and as such cannot take their jobs lightly.
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When a speaker sought deferment of the second phase of convergence of Indian Accounting standards with International Financial Reporting Standards (IFRS), he said: “It will be unfair to the first list of companies. If there are any difficulties, we will resolve them. We don't want to postpone it, just for the case of postponement. Taxation issue has been taken care of and we are working on capacity building issue. About 90 per cent of the companies will set to gain on the transition.”
Companies Bill
Mr. Khurshid said that Companies Bill 2009 would be introduced in the forthcoming budgetary session of Parliament. Urging the members to send in their feedback on the new proposals, Mr. Khurshid said it was not the intention of the Ministry to make companies adhere to Corporate Social Responsibility target and it was not mandatory.
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T.V. Somanathan, Joint Secretary, Ministry of Corporate Affairs, said that the India's signature event was held in four metros and Hyderabad from December 14 to 21.
Major concerns
In his welcome address, MCCI president T.T. Srinivasaraghavan said that the Ministry would have to address major concerns in the Companies Bill such as fixing the term of independent directors; appointment of auditors and compulsory contribution for CSR.