| Independent directors' club has 15 crorepati members |
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Mumbai, 4 February David B Yoffie, a professor of international business administration at Harvard Business School, is the author of Judo Strategy, a management bestseller that drills home the ultimate principle of corporate strategy: Maximise impact while minimising efforts. Yoffie has another claim to fame. He is the highest- paid independent director in a single Indian company. Bangalore- headquartered Mindtree pays him ₹ 1.44 crore a year. However, Yoffie is fourth in the overall list of 15 crorepati independent directors, as he doesn't sit on the board of any other Indian company. The top place goes to wellknown economist Omkar Goswami, an independent director in eight companies, including Infosys and Dr Reddy's Labs, who earned ₹ 2.8 crore in 2012- 13. The second- most soughtafter independent director is Aman Mehta, who retired from HSBC in 2003 after spending about 36 years at the global bank in different parts of the world. Mehta is a director in six companies. Tata Consultancy Services alone accounts for ₹ 1.36 crore of his total earnings of ₹ 1.98 crore in 2012- 13, according to data available with financial service firm Capitaline. Economist Vijay Kelkar, who served in prominent government positions like those of finance secretary and petroleum secretary, is the third- highestpaid independent director, with a total remuneration of ₹ 1.49 crore for his role as nonexecutive director on the boards of TCS, Lupin, JSW Steel, JM Financial and Tata Chemicals. Interestingly, Wadia Group Chairman Nusli Wadia is ninth on the list, earning ₹ 1.05 crore, from his independent directorships at three Tata group companies — Tata Steel, Tata Motors and Tata Chemicals. Apart from Yoffie, there is one more foreigner on the list. Anthony Wild, who holds a PhD in Physical Chemistry from the University of Cambridge, rakes in ₹ 1.02 crore for being independent director at just one Indian company, Ranbaxy Laboratories. Of course, Wild is aboard member of several privatelyowned specialty pharmaceutical and biotechnology companies globally. "In India, companies give experience more importance while appointing independent directors," says Shriram Subramanian, founder & managing director, InGovern Research Services, an independent corporate governance firm. " This is the reason why most of these independent directors serve across multiple boards and their average age is much more than the nonindependent directors. In fact, amajority of the independent directors is aged more than 60 years," says Subramanian. Turn to Page 18 > EXPERIENCE PAYS Independent directors with highest remuneration in 2012- 13 12 3 4 5 67 8 9 10 Omkar Goswami ~2.82 cr Nasser Munjee ~1.35 cr Subodh Bhargava ~1.27 cr Anupam Puri ~1.17 cr Nusli N Wadia ~1.06 cr Anthony H Wild ~1.03 cr Aman Mehta ~1.93 cr Vijay Kelkar ~1.49 cr David B Yoffie ~1.44 cr KV Kamath ~1.38 cr Source: Capitaline Compiled by BS Research Bureau Other crorepati independent directors |Percy K Shroff |Rajesh V Shah |Akihiro Watanabe |Venkatraman Thyagarajan |Ron Sommer |
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But hefty fees paid to independent directors alone cannot ensure high level of corporate governance. Looking at a broad- based trend, InGovern believes many companies hire partners of reputed law firms as independent directors because they have thorough understanding of the legal environment under which a company operates. Some of these companies also receive professional services from the legal firms of the independent directors. This, however, can raise conflict of interests. >FROM PAGE 1 |
| 6- month breather for eateries |
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New Delhi, 4 February Restaurants and eateries have got six more months to obtain a food business operator licence. The deadline set by the Food Safety and Standards Authority of India ( FSSAI) has been extended till August 4 from the earlier February 4. The National Restaurants Association of India ( NRAI) had written to FSSAI to extend it. Owners had pointed out that the government even after announcing the mandatory permit did not facilitate the on- ground procedures for getting the licence. " The set- up was not ready to process the applications. Everything had to be done manually," said Prakul Kumar, secretary general, NRAI. Online application was allowed only in January, close to the final deadline, he said. FSSAI is also dealing with a rush of applications. It announced on Tuesday that " due to the unprecedented volume of licensing and registration applications, the functionality of online payment is currently disabled". It also said only demand drafts and challans would be accepted for payment. "It is not like restaurants would be asked to shut shop immediately. There is a process and usually a warning period of three months is given to the erring person, that can ultimately lead to prosecution," said Kamlesh Barot, president, Federation of Hotels and Restaurants Association of India. Several restaurants have also found the process of filling the applications and the requirements to comply to be impractical. " It took us over two days just to fill the form. Most restaurants would find it difficult to comply with these norms," said Virat Chhabra, spokesperson, Mia Bella Gastropub at Delhi's Hauz Khas Village. While most organised entities have managed to get the licence, it is hawkers and others in the unorganised sector which could be in trouble. The idea behind the guidelines is to ensure hygiene and international standards for food, through specific rules about procurement of material, labelling, advertising, etc. BITTER OFFERING |Most owners said the government, even after announcing the mandatory permit, did not facilitate the onground procedures to apply for the licence |The idea behind the guidelines is to ensure hygiene and international standards for food, through specific rules about procurement of food material, labeling, advertising etc FSSAI extends deadline for obtaining food business operator licence to August 4 |
| Board meeting date may be ex- date | ||
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Mumbai, 4 February To curb speculators from manipulating the share prices of delisting- bound companies, the Securities and Exchange Board of India (Sebi) plans to make the board meeting announcement date the ex- date to identify shareholders eligible to participate in the reverse book building ( RBB) process, or the price- discovery mechanism used during voluntary delisting of shares. An ex- date, in the case of delisting, is the date on or before which an investor has to own shares of the company. The move will ensure only genuine and existing investors have a say in the delisting process and set the exit price, usually a bone of contention. Currently, investors can buy shares and participate in the delisting bid of a company even after the announcement of delisting. Typically, operators or speculators start garnering shares of a company on buzz or announcement of delisting. Subsequently, these shareholders come together and dictate the exit price for delisting. Often, the exit price demanded is so high that the delisting bid fails, depriving exits to genuine shareholders and resulting in steep price corrections. Sebi is also exploring other options such as suspension of trading and price bands to arrive at more ' realistic' prices for delisting from stock exchanges, sources said. This month, the regulator would float a discussion paper on the new framework for delist offerings and receive feedback on various proposals, a source said.WHAT IS REVERSE BOOK BUILDING? |It is a price discovery mechanism used during voluntary delisting of shares |Under this, shareholders can bid at various prices above or equal to the floor price |Bids are accepted and matched by the exchange till the time the offer is open |The price at which most bids are received becomes discovered price |Company has to buy back shares from public at the discovered price |Either 50% of public shareholding or 90% promoter holding (whichever is higher) has to be achieved for successful DELISTING
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