Emphasising the need for good corporate governance, Company Law Board Chairman Dilip Raosaheb Deshmukh on Friday said there needed to be a shift in attitude towards minority directors in the board rooms.
"There has to be an attitudinal shift towards the minority directors of the board. The majority of the board should not wield their powers for self-aggrandisement or treat the company as their personal fiefdom," Deshmukh said here.
Deshmukh said that effectiveness of the board of directors is a key performance driver for any company.
"The principle of the board of directors as representatives of the shareholders is to oversee the function of the organisation and ensure that it continues to operate in the best interests of all the stakeholders," he said.
Deshmukh was speaking at a conference on 'Corporate Compliance & Role of Independent Directors' organised by industry body Assocham.
Citing the example of fraud at Satyam few years back, Deshmukh said that incident projected a collective failure of the corporate governance system.
"In the Satyam case, it was shocking how the promoters fairly successfully managed to defraud investors, which was neither sensed nor detected at all levels of corporate governance structure.
"All the three pillars of protection for the investors the board, the auditors and the monitoring agencies had collectively failed (in that instance)," he added.
According to him, the new Companies Bill has proposed substantial changes which would act as deterrent against corporate misgovernance.
The Company Law Board is a quasi-judicial body.