In the best interest of Co, issue of conflict of interest in related party transactions needs to be looked at judiciously: MoS MCA
New Delhi, Jan 11 (KNN) In the best interest of the company, the issue of conflict of interest in related party transactions needs to be looked at judiciously, said Union Minister of State for Corporate Affairs P P Chaudhary said today stressing that the Independent directors have to exercise special care while looking into such related party transactions.
Chaudhary said there is a need to further strengthen the institution of independent director and they are required to play a critical role in establishing internal financial controls.
He was speaking at the inaugural function of the two-day orientation programme for independent directors organised by the Indian Institute of Corporate Affairs (IICA) at its campus in Manesar, Gurugram.
The Minister, however, noted that caution must be exercised by independent directors while evaluating issues related to remuneration of the management.
According to a report, the corporate affairs ministry has already deregistered more than 2.26 lakh companies for being inactive for long apart from disqualifying over 3 lakh directors.
Chaudhary further said that Independent Directors are watchpersons of Corporate entities.
Referring to the Section 150 of the Indian Companies Act, 2013, he shared the Central Government is seriously considering to develop a data base of Independent Directors at IICA.
Gopal Krishan Agrawal, Member, Board of Governors, IICA, said that Independent Directors bring their experience of diverse fields to a company’s Board. However, appropriate knowledge and skills through such Capacity Development Programmes are vital. What is important is that the IDs have to set-up policy and systems.
The Two day Orientation program will train 40 newly appointed IDs of PSBs and PSUs. The Program will have the presence of expert speakers and trainers from MCA, SEBI, Department of Public Enterprises, BSE, CII, IFC-world bank, UN Global Compact Network, GRI, International Integrated Reporting Council, Corporate sector, Banks, Media and Academia among others. (KNN Bureau)