Industry Odisha Bureau, Sep 11: O.P. Bhatt has resigned as Coforge’s non-executive chairperson. He was also an independent director at the company. The move came in a regulatory filing this week. That filing referenced Coforge’s Board Evaluation Report, or BER.
Why the Filing Matters
Coforge said certain material information was not fully disclosed. This related to the BER and the chairman’s performance. The company did not detail what that information contained. The episode has renewed scrutiny of board-evaluation practices broadly.
How Board Evaluation Works
India’s framework began under the Companies Act, 2013. Sebi later added requirements for listed companies. A company’s nomination and remuneration committee, or NRC, typically leads the process. Boards can also hire external evaluators instead.
Reviews examine board structure, meeting quality and director participation. Individual directors are assessed too, often through rating forms. The resulting BER goes to the chairperson and NRC chair.
The Checkbox Problem
Anandorup Ghose of Deloitte India says guidelines match global standards. But implementation quality varies widely between companies, he said. Many reviews rely on self-assessment and peer feedback. Participants often avoid sharply critical responses, Ghose noted. That can produce standardised answers with limited diagnostic value.
Mariwala’s Blunt Assessment
Harsh Mariwala, Marico’s founder and chairman, was direct. He rated Indian board effectiveness around 2 to 2.5 out of five. Mariwala is also lead independent director at Thermax. He said evaluations remain a “Sebi-suggested form” filled up routinely.
Boards need customised reviews reflecting each company’s context, he argued. Questions should cover meeting dynamics, dominance, participation and openness. Still, Mariwala credited progress from boards once run by family and friends.
Deeper Reviews Gain Ground
Some firms now offer more intensive alternatives. Russell Reynolds Associates runs a “board effectiveness” service every three years. Sanjay Kapoor, who leads the firm’s India board advisory practice, described it as intense. It can include observing board meetings and one-on-one interviews.
Korn Ferry conducts roughly 15 board evaluations annually in India. Chairman Navnit Singh said clients increasingly want individual director assessments. Such work can take several weeks of engagement, he said. Mid-tier companies are also exploring similar reviews, seeking stronger governance credentials.
Compliance Versus Effectiveness
The Coforge episode highlights a distinction experts keep raising. Completing an annual form satisfies regulatory requirements. It does not guarantee candid, useful findings. Genuine effectiveness needs honest participation and follow-through on results.
The Road Ahead
India already has a formal board-evaluation architecture in place. The harder task is making assessments customised and consequential. Boards, experts say, must move past paperwork toward real accountability.
