Pointing out that early warning signals are not given by exchanges, BSE chairman S. Ravi urged investors to be more vigilant while making informed decisions.
Mr. Ravi said that it was the vision of BSE to have 22-hour trading formats.
“Early warning signal is not given by exchanges, but surveillance takes place all the while,” he said in response to a suggestion made during an interactive session organised by the Merchants Chamber of Commerce and Industry (MCCI).
Calling for a stronger governance framework in companies, he said that there should be a clear role of the functional directors and independent directors. The quality of the board was also important, he said.
MCCI past present Amitav Kothari suggested that BSE develop an early warning signal to alert investors against possible erosion in their share value. He also raised the issue of the resignation of auditors of some companies, which delayed their results declaration in 2017-18.
Mr. Ravi said he felt that there should be a forum for investors to interact with auditors. “They [investors] also need to be more vigilant,” he said. As for auditors, Mr. Ravi said he was of the view that they were now realising that they cannot merely “sign the results.”
He said that capital would become constrained in the current geo-political situation and companies would have to look for the right type of capital. “Efficient management of capital will be the key for corporates,” he said. On the recent trend of “judging a company by its quarterly results” (flagged by Mr. Kothari), Mr. Ravi said that this was good as it allowed a quarterly review instead of a “shocker at year-end.” He said that de-globalisation was now happening and trade pacts were being broken as every country was now trying to protect its own economy.