RCA

Company directors will have to shape up if the Government has its way. They will not be able to remain silent about the wrongdoings of a board or offer the excuse that they were ignorant of such actions. Also, they will not be able to just lend their name to the company and earn easy money. Continuance on the board will depend on their performance as for the first time there could be guidelines to measure directors’ performance as for the first time there could be guidelines to measure directors’ performance. The Corporate Affairs Ministry wants to introduce a new concept called the ‘knowledge test’ to find out that if the directors had previous knowledge of a company’s wrongful acts. As a first step, it would be ensured that the board processes are totally transparent.