Dr J. J. Irani, a former managing director of Tata Steel and who was on the board of a number of other Tata companies, resigned as non-executive Chairman and quit the board of the Chennai-based Everonn Education.

His move (in September) came within days of the arrest of Everonn's co-founder and Managing Director, Mr P. Kishore, on charges of bribing an income-tax official and for evading tax.

The latest of similar high-profile exits was that of Mr Ravi Ruia, Chairman, Essar Energy, who “voluntarily stepped down” from the board after he was named in a chargesheet filed by the Central Bureau of Investigation in a case involving Essar Group and Loop Telecom. The executive Chairman of SKS Microfinance, Mr Vikram Akula, had to bow out from the board of the company he founded after it posted a loss of Rs 384 crore in the September quarter. The month before, Mr Pramod Bhasin had also quit as an independent director of the company.

Ongoing investigations of corporate bigwigs in the telecom sector and the uncertainty over business prospects seem to have taken a toll on India Inc.

Directors, including Non-executive and Independent directors, of about 500 companies have relinquished office in the last five months. It is almost a repeat of what happened after the Satyam Computer scam broke out in 2009.

DB Realty had to cope with the resignation of two executives — Mr Shahid Balwa, Managing Director, and Mr Chandan Bhattacharya, Director — who were charged in the 2G spectrum scam.

Mr Lalit Kumar Gupta, Joint Managing Director and Chief Executive Officer, JSW Energy, quit without citing reasons. “There is definitely pressure on Directors holding executive positions to deliver. The current economic downturn and rising costs amid slowing demand have made it difficult for them to protect the company's profitability. There are also a few cases where Executive Directors quit for better prospects,” said Mr E. Balaji, Managing Director and Chief Executive Officer, at HR service provider Ma Foi Randstad.

Mr Balaji reasoned that some of the independent directors' exits could have been to avoid controversies. He added, “Most of them are eminent personalities who associated with the companies not for the remuneration, but out of personal interest in the field.”

Several Chief Financial Officers and Company Secretaries have also put in their papers in recent months, not all of them from troubled companies.

Ms Smita Affinwalla, Head of Consulting, Development Dimensions International, said people at the highest level are trusted with making decisions that have a huge impact on the financial health of the corporation and equally on employees, customers and shareholders.

“Often, these decisions are to be made in situations where timeframes are short and information is not as unambiguous as desired. A high degree of good judgment is required. The dividing line between good and bad decisions is often thin,” she added.

According to BSE data, 16,816 individuals are on the boards of 2,865 companies. However, only 14,813 have disclosed their positions. These people occupy 20,554 directorship positions in 3,334 companies listed at national-level stock exchanges and 415 companies listed on regional bourses. Among them 84 are from Civil Services; 1,815 are Chartered Accountants; 449 Company Secretaries, 269 Cost Accountants; and 1,355 Lawyers.

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