“Skills of directors should rise to regulatory requirements, capital market expectations”

Gurumoorthy Mahalingam, Whole Time Member, SEBI has emphasised the need for having a good corporate governance mechanism for companies when the country's macro economic scenario was proceeding at globally high growth rates.

Such high growth rates requires capital market funding. However, the skills of directors should rise to the regulatory requirements and capital market expectations, as market investors look for transparency and disclosure. The foreign portfolio investors would also look at fundamental soundness of a company. Therefore there is a need to have competencies and necessary oversight for directors to ensure that companies have good corporate governance, he said.

According to him, India needs a granular type of regulation until it reaches a self-regulatory position for moving to principle-based regulation.

Mahalingam was speaking at a seminar on "Corporate Governance: Developing a Skill Matrix for Directors" organised by TKM Institute of Management in Kochi.

Later at the deliberations, speakers identified ethical, environmental, social aspects that had to be dwelt upon to enhance general competency of every director. In order to avoid conflict of interest and to avoid wrongful interpretations, directors needed specialized training. Directors had to comprise of specialists with technical skills and those with relevant experiences.

Among the skills identified were analytical skills, technical, financial, HR, marketing, risk- perception, legal etc. The seminar also pointed to scams which underlined the need for integrity at the board level. For futuristic growth there is need for linking strategy and risk management systems.

e.o.m.

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