Companies Act, 2013 section 150 introduces one to selection of independent director through a data bank maintained by any body, institute or association etc. Just now I passed with flying colors the self-assessment test conducted by Indian Institute of Corporate Affairs to join 1950 other qualified professionals who offer themselves as independent directors. The purpose of this article is to explain why you being a lawyer, CA, CMA or CS or a senior executive recently retired should appear for the examination based on Companies Law, Finance, Management or Corporate Governance, Audit, Secretarial law or Securities law and offer yourselves as an independent director.
Out of 15800 plus who have registered as independent directors, 2760 have registered as women independent directors while nearly 1300 companies have also registered themselves. Let us have the latest information on the same from the following web site of Indian Institute of Corporate Affairs. (IICA)
https://www.independentdirectorsdatabank.in/ and www.mca.gov.in
Why to register as an independent director?
It is a confirmed fact from recent raids, investigation of numerous corporate accounts, hundreds of corporates being managed by drivers, cooks or janitors as directors without their own knowledge and being paid nothing in their accounts, a large number of so called directors lost their position and hence your chance to be available at least.
In view of above state of our economy, it is very pleasing to hear that rules have been amended to conduct written examination by IICA at your own home after getting registered with Ministry of Corporate Affairs and making payment with IICA, get training by video lectures, read Companies Law thoroughly and appear for the written test after getting an online date approved at a slot available on that particular date.
Let me introduce yourselves with the actual facts. Yes, every thing from horse’s mouth. Actual information from web sites since I just used them and passed the test. I got 82% and among 94 percentiles. Not bad for a senior, I presume.
What are the videos which I am mentioning here?
Broadly classified as Board Essential Courses and Board Practice Courses, they are as under:
Board Essential Courses
1. Incorporation of Companies
2. Share Capital
3. General Meetings
4. Accounts of Companies
5. Debenture and Bonds
6. Acceptance of Deposits
7. Prospectus and Allotment of Shares
8. Related Party Transactions
9. Audit and Auditors
10. Mergers and Amalgamations
11. Institution of Directors
12. Duties of Directors
13. Liability of Directors and KMP
14. Oppression and Management
15. Safeguarding Directors
16. Penalties and Compounding of Offences
18. Board Committees
19. Secretarial Audit and Compliances
20. Board Meetings
21. Secretarial Standard 2
22. Corporate Social Responsibility
23. How to read Balance Sheet
24. Decoding Financial Statement
25. Professional Ethics
Board Practice Courses
1. Due diligence before joining the Board
2. Exemplary Board
3. Board Effectiveness and Culture
4. Building resilient company and: Board’s role
5. Governance of Committees
6. Governance and Strategy
7. Managing CSR and Engaging stakeholders
8. Managing Trough financial ratios
9. Board evaluation
10. Evaluation of independent directors
11. Case study – World .com
12. Case study – Enron Corporation
13. Case study – Volkswagen
14. Case study – Olympus
15. Case study – Hydro One
16. Case study – Satyam Computers
17. Case study –Maruti Suzuki
These 42 videos have to be listened for hours together, some of them 30 minutes, some 40 minutes and others a very long ones with actual quotation of applicable laws, practical examples and quiz intermittently to awake you from your deep slumber if you happen to come across. Finally, you may be asked to answer 5-7 or 8 questions based totally on the lectures, applicable laws or your knowledge.
Yes, it was difficult to answer many of them borne out of deep experiences of the experts who prepared them with actual instances interspersed from professional life. Case studies build up the momentum to the top and drop you with the sad experiences of investors, management men, affected Board or orphaned employees who got cheated on account of greed of one or two top executives, lackadaisical Board and non-active regulatory authorities. It is difficult to believe those case studies which really happened in flesh and blood.
The case study of Maruti Suzuki was quite unexpected from its progressive management (that was the presumption among the investors).
Yes, you guessed properly that the question sessions offer deep thinking not only about the answer but also about the questions itself. Good experts only raise questions with answers to be found by you as managers.
Unless one gets immersed in the materials and listen attentively, it may be difficult to prepare oneself for the examination which will be very professional and uses actual experiences extensively.
For your stimulation of intellectual instincts, can I give you some brain storming questions? Ethically, as per international standards, none could give exact ones. (all imaginative ones only)
How to get trained for the above examination?
Many of the materials, some of them in hundreds of questions, in multiple choice format, haunt you for a long time by stimulation of knowledge. You will come to know that your ignorance has not been a bliss and you could have used your useful time with the latest knowledge and that age is only a number but youngsters march over you with adequate experience. Even a kid shows the way for learning.
My purpose of writing this article is to stimulate you, a brilliant professional but never thought of serving any Board as a member, a senior always condemned by family members of talking about the past or a brilliant woman executive who never had a chance to work face to face in a Board since it had been a male kingdom with long winding lectures from senior management. For professionals who never served the Board of any company, it is the new vista to professional kingdom.
I would recollect a meeting where the CMD of a leading Public sector bank wanted the Secretarial department to explain Ind AS in banks in two sentences for a lecture. While the whole world has adopted to Ind AS standards, PS banks in India always find a way to request RBI for postponement of implementation of its standards for ever. All due to ignorance and lack of real understanding of modern developments. My two articles on Ind AS bear witness to it in Taxguru.in.
Let us enroll as a member in the proper web site, pay the fees of Rs 5000 plus applicable GST, patiently listen to 42 videos several times, appear for the test multiple times to understand the questions itself thoroughly and ultimately serve the Board for the betterment of Board/Company governance of our nation. Bon Voyage! I am damn sure, you will enjoy your journey as a Board member in near future, particularly as an independent director.