Narendra Modi, who has become the Prime Minister for the second term is looking to overhaul the nation’s corporate governance system that allowed a string of frauds to mar his first stint in office.
Injeti Srinivas, the top bureaucrat in-charge of corporate affairs said that independent directors on company boards will soon have to clear an exam before they can be appointed. He further said that the government is also seeking a ban on Deloitte Haskins & Sells saying that it failed to warn of mounting risks at a major shadow lender and the banking regulator suspended an EY affiliate this month after finding problems in one of its audits.
Srinivas said that they want to demolish the myth that independent directors don’t have any fiduciary duty and that they want to propagate corporate literacy to make them aware of their duties, roles and responsibilities.
He said, the examination will be an online assessment covering the basics of Indian company law, ethics and capital market norms among other areas.