On April 21, before a packed Narada Gana Sabha hall, Justice Akil Kureshi delivered a talk on ‘Independence of the Judiciary’. It was one of the best speeches delivered in Chennai in recent times on the subject.

One sentence of his set the intelligentsia thinking, and is now a hot topic for discussion: “A judge to be independent should have no personal ambition.”

These 10 words convey more than possibly a 800-page judgment on any complicated issue that courts have had to deal with in the past.

Let’s contextualise the statement and discuss its implications in the arena of independent directors as well.

Selection, appointment

The core of the problem seems to be the process of selection or appointment.

The collegium system now in vogue for years seems to be a mixed bag with some deserving candidates left out with no explanation given. Obviously there is a case for tweaking and refining the system to make it more robust.

Justice Rohinton Nariman had suggested involving four retired High Court judges as part of the collegium. Whether this would improve things is anybody’s guess.

Any system has to be transparent and should ensure that the best gets selected. In the case of independent director, the selection process suffers from lack of transparency to some extent. X knows Y and Y knows Z is the overriding factor in the selection.

The issue to ponder is whether the process of selection of judges and independent directors has led to the right outcomes.

In the case of judges the assessment is the quality of justice delivered, and in the case of independent directors, whether the decisions taken have protected the interests of all stakeholders, particularly minority shareholders.

There are conflicting views on personal ambition coming in the way of pure play independence.

Justice Kureshi has let the cat among the pigeons by stating emphatically that it does. The ambition of getting some future plum posting does come in the way of delivering neutral judgment is the short point. The other view is ambition per se is not the impediment.

On the other hand, a healthy and well-directed personal ambition can enhance the quality of orders as long as it ticks the box of honesty.

This conflict is also evident in the case of independent directors. Building of personal brand and having ambitions do matter up to the time of selection and appointment.

An independent director using the entry into corporate boards and nurturing hopes of further appointments based on this can be perceived as ‘ambition coming in the way of being independent in discharging his duties’.

The other view

The other way to look at it is: what is wrong in leveraging the entry and having ambitions to grow further as long as the code of conduct is followed meticulously and, more importantly, if the independent director acts professionally and objectively in discharging his board duties?

There are no clear-cut answers to these questions since it is finally an issue of behaviour, that is, acting in accordance with the directions of one’s inner conscience than any reference to law or regulations.

As someone rightly put it, “The best reference point to manage conflict is the nearest book on moral science and not books on management and corporate laws.”

Justice Kureshi’s statement holds true to some extent for independent directors too, in ensuring good corporate governance.

The writer is a chartered accountant

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