Scandals have always been part and parcel of corporate world as in any other walk of life. And they come in different hues – financial, people related et al. Unfortunately no other walk of life continuously and consistently propagates ethics and transparency as much as corporates do, particularly in the Indian context. Alas many fail to walk the talk...
In the light of Bhopal tragedy, one among those who now appears to have not lived up the ethics test is Mahindra Patriarch Keshub Mahindra. He was the non-executive chairman of Union Carbide India when the disaster struck the plant at Bhopal in Dec 1984.
Today he sits on the boards of HDFC, Bombay Dyeing and a host of Mahindra group companies. Speculation is rife about whether or not Mr Mahindra will relinquish his post in all organizations he is associated with in the light of the court verdict on the tragedy. Industry bodies like CII while standing firmly by Mr Mahindra have also hinted at the possibility of him stepping down.
Whether or not he quits, this incident has brought to light the role of non-executive chairman and independent directors yet again within a span of 18 months. The intense debate on the role of independent directors was first sparked off in Jan 2009 when the country"s biggest corporate scandal, the Satyam scam, broke out.
Now Mr Mahindra"s role or the lack of it in Union Carbide has brought the focus back on this topic. Questions such as where does the role of an independent board member commence and where does it end? How far should independent board members be involved in key decision making in the company? and so on arose.
A section of people also feel Mr Mahindra had could have engaged in rehabilitation initiatives for the victims in these 25 years. He is widely respected for his philanthropic efforts and it is a bit surprising to see him do little in this incident directly or indirectly.
A case in the court was pending for about 25 long years. This in itself is a crime! There may have been apprehensions about directly involving in rehabilitation efforts when the case is pending as there was a possibility of the judiciary assuming that he was involved in relief efforts to influence the victims and witnesses.
Yet some people say they expected more responsible act from Mr Mahindra considering his stature and penchant for philanthropy.
While it is difficult to find instant answers for some of these questions, things will never be the same again for Mr Mahindra as well as those who fancy sitting on many boards as independent directors.
The debate on the role of independent directors and how their performance should be appraised will linger on for sometime. One hopes concrete solutions emerge from these experiences that pave the way for better governance in Corporate India.
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