Let us see what the law says about Board Composition (some of it is common sense too!):
– board should have an optimum mix of Executive and Non-Exec directors
– check all remuneration is checked by the Board and approved by the shareholders
– check whether the Board has met at least 4 times in a year
– committee limit is 10 committees per director
– check the Code of Conduct (check whether posted on the website)
– check whether Annual Report contains a declaration to the effect of compliance affirmation.
Well what i wrote above is the LAW.
Frankly I would look for the following (over and above this):
– is there at least one of the following categories –
a. a self made business man (reasonably successful) who does not care about the fees or the ‘social status’
b. a CA in practice
c. a lawyer in practice
all the 3 should be really independent – not classmates, cousins, friends or neighbors. It means there should have been a selection process.
Ability of at least 2-3 directors to tell the MD – ‘you are talking through your hat’ (or as a friend said ‘pugree’!!), asking the auditor for the working papers of the audit and not just the audit report, ….
If you find such a board please tell me, I am still searching.
Sounds cruel? Hmmmm truth hurts perhaps?
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