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5/09/2008

Flogging a dead horse

Conrad Raj is tenacious in trying to rein in the abuses in corporate governance and the way independent directors are appointed. Today he wrote an article telling companies not to appoint cronies as independent directors. And he praised those independent directors who resigned when they saw things were not right. For this part I strongly disagree with him. The independent directors are there exactly for this purpose, to make right what they see is wrong. Running away is running away from problems or in army terms, a dereliction of duty and responsibilities. It is important and honourable and a duty for independent directors to stay on and right the wrong or if they could not do so, tell the shareholders why they have to leave. I am still waiting for a system that works to replace the present system when companies could appoint cronies as independent directors. How could we allow such a system to exist in the first place? And how could we allow it to continue to exist without doing anything to it? Beats me. An international financial centre could not come up with a better system!

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