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'Ethics & Governance' lesson should start from school, says Federal Bank's Independent Director, Sankarshan Basu

'Ethics & Governance' lesson should start from school, says Federal Bank's Independent Director, Sankarshan Basu

By Divya Momaya | Jescilia Karayamparambil
Calendar

Oct 01 st 2021

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Professor Sankarshan Basu has been an Independent Director on several boards and a member of several advisory committees. Recently, Basu — a professor of quantitative finance and risk management at IIM Bangalore — was inducted into the board of Federal Bank as an Independent Director. In the past, Basu has been a Board Member of The Clearing Corporation of India Limited, Bilcare Limited, BgSE Properties and Securities Limited and Bangalore Stock Exchange Limited.

In the latest edition of ‘Grow with Governance’, Basu talks to MentorMyBoard’s Divya M and Free Press Journal’s Jescilia K, about his board journey and the challenges faced by governance in the country.

https://youtu.be/G2Lb1fqmVo8

Edited Excerpts:

Tell us about your board journey?

The first board that I was appointed on was the Bangalore Stock Exchange (which was still a stock exchange in 2012). I joined as Public Interest Directors (PID) (also referred to as Independent Directors), appointed by the regulator SEBI.

It was a turning point in the history of the stock exchange due to various regulations introduced by the regulator. I joined the board in December 2012. It was around the same time SEBI came out with norms like daily turnover, net worth, etc. Most regional exchanges had to shut down as they could not meet SEBI norms, while few continue to exist.

Shutting an exchange was a herculean task as one cannot just decide to close it down and walk away. There are multiple stakeholders involved, taxation issues and legal issues that need to be addressed. Being on the board at that time was quite an experience. Not many will have such an experience of overseeing such an activity.

The next board journey was as a Board Member of Clearing Corporation of India Limited (CCIL). At that time, CCIL was one of the few entities in this area. I was on that board for seven years.

My next stint was with Bilcare Limited. It taught me what not be done. I left the board within a year mainly because there was a lack of some processes.

Can you share your experience being a Board Member of a family-run business?

I have only one experience of being on a board of a family-run business or family-dominated business and that is Bilcare Limited.

I was on that board at the time corporate governance was an evolving field. Ten years back, people did not bother much about governance.

Based on that one experience, I can say that governance in a family-run business is lower and weaker compared to a professional-managed business.

How does risk management become critical in the banking sector at the board level?

At the board level, you do not see every single transaction and it is impossible to do so. But what you can and should do is getting the board to set up the right process. It is fundamental. That alone will not suffice. However, it is a very important condition.

The second thing here will be about asking the right questions. It may not be a preferred question, but a tough question. There will be failures or at times, breaches as well. But the question, in this case, will be why this happened, what action was taken to address this and so on. For instance, in the PNB-Nirav Modi case, the maker-checker model was violated despite having a process. In this case, the right questions should have been asked.

At times, boards share agenda documents with Directors just a few days before the board meeting. Your view.

I am on the Risk Management Committee (RMC) of National Commodity Clearing Limited (NCCL). It uses a process which I think can be used by other organisations too. We organise a pre-RMC meet. We do this three-four days before the officially recorded meeting. Then, we get few days to think about various topics listed for the meeting and raise the relevant questions during the meeting. Such pre-meetings allow the members to differentiate between the important topics (needing discussions) and daily topics (that may not need much deliberation).

How can banks help in encouraging Environmental, Social, and Governance (ESG) among their borrowers?

I do not think banks themselves understand what ESG-compliant product or project is. There needs to be a larger understanding of the bankers themselves. It is only then can you devise such a product, go out in the market and educate the borrowers.

As a professor, how critical do you think it is to teach the importance of governance?

It is very important but we do it very late. Increasingly, it is the business schools that have started looking at Ethics and Governance as part of their curriculum. But I think this should be taught to kids when they are young.

The way financial inclusion is included in the school curriculum, Ethics and Governance can be included in some way. Ten weeks of training in B-School on this topic will help a few change their perspective. But to have a larger impact it has to be inculcated at the school level which is the formation years.

What are the challenges faced by governance?

Today, it is facing the challenge of accountability. There is inequality. While for some organisations there is a very high level of accountability, there are some that do not have to follow the same level of accountability.

Making someone accountable and not giving them the authority to do anything does not make any sense -- is another challenge.

Do you have any favourite book on Governance?

There is this latest book that teaches you how governance should and should not be. That book is 'The Anarchy' by William Dalrymple.

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Category

  • All
  • Boardrooms
  • BOARDROOMS
  • Independent Directors
  • Role of Board
  • Mindset Shifts of Boards
  • Independent Directors and Promoters
  • Sustainability / ESG
  • business implication
  • employee exits
  • COMMITTEE MEETINGS
  • Union Budget
  • Independent Director
  • Grow with Governance
  • Grow with Governance
  • INDEPENDENT DIRECTOR
  • Entrepreneurial Board
  • ESG & ITS IMPORTANCE
  • leadership coaching
  • Change Management
  • Advisory Boards
  • Boards
  • Boardroom
  • Brand Yourself as a Leader of the Company
  • Kindness
  • Are you hesitant to speak in the Boardroom!
  • Governance & ESG
  • Directors
  • Independent Directors
  • Corporate Governance
  • Leader development
  • Gratitude, Purpose
  • decision making
  • Systematic Investment Plans in Emotional Intelligence
  • Corporate Governance
  • The Board’s Role in ESG!
  • Balance Boards
  • Agility and Compassion
  • Governance and Board
  • Diversity and Inclusion
  • Directors,Promoter Directors
  • Board Members, Directors and Independent Directors
  • Board and Senior Management
  • New Directors
  • Cyber Insurance
  • Salary Increment
  • Economy Growth
  • Human Resources
  • Generating Wealth Beyond Money
  • Agile Mindset for Leadership
  • Aspiring Independent Directors
  • Board Leadership
  • Corporate Governance & Women on Boards
  • BOARD MEMBER
  • SME
  • WOMEN DIRECTOR
  • BOARD MEMBERS

Archive

  • 2021
    • April (3)
      • Will you drive your vehicle without a dashboard?
      • Are you making SIPs to improve your Emotional Intelligence
      • Corporate Governance needs a Moral Compass – Ethics in Indian Boardrooms!
    • August (9)
      • Grow with Governance: ESG is the umbrella for CSR, says Vedanta's Roma Balwani
      • Grow with Governance: PadUp Ventures' Rajat Jain Demystifies Correlation of Governance and Economic Growth
      • Grow with Governance: Family governance impacts the culture of a family-run business, says Equations Advisors' Mita Dixit
      • Entrepreneurial Board
      • NEW REGULATORY PROVISIONS RELATED TO INDEPENDENT DIRECTORS
      • ESG & ITS IMPORTANCE FROM THE POINT OF VIEW OF BOARD MEETING
      • Start early, don't wait till retirement to become an Independent Director, says Increate Value Advisors' Milind Sarwate
      • The winding road of leadership coaching in the post-pandemic era
      • Challenges of Organizational Culture Change
    • February (4)
      • Re-examination of Purpose by the Boards in Post -Pandemic Era
      • What Makes Great Boards Great! Performance Evaluation by Boards and Role of Independent Directors
      • Promoter Director – Time to become Custodian of Governance!
      • Diversity and Inclusion – The Board Perspective!
    • January (2)
      • New Directors - Have you done your due diligence
      • Cyber Security Insurance and Boards
    • July (7)
      • Why Advisory Boards Are Important for Indian Business Corporates?
      • Grow with Governance: ESG essential to repair the damage economic activities caused to the earth, says CA Shailesh Haribhakti
      • Top 10 areas to contribute in Boards as Independent Directors
      • Top 10 Questions to Ask in Boardrooms!
      • Essential HOWs of Boardroom!
      • Kindness is key
      • How to Brand Yourself as a Leader of the Company?
    • June (6)
      • Leading from the Boardroom
      • Are you hesitant to speak in the Boardroom!
      • The Neem Project a Leadership case study
      • Directors Liability in India
      • Why do promoters need Independent Directors?
      • Corporate Governance Deviation – Infosys Case Study
    • March (4)
      • Board Refreshment: Finding the Right Balance for your Board!
      • HR Governance and Board – How Important Is It?
      • Agility and Compassion: Two Pillars for Boards in the Post Pandemic Era!
      • Modernizing Governance: The Board’s Role in ESG!
    • May (3)
      • Restructuring appraisals in 2021 – Gratitude, Purpose & Meritocracy
      • How do you make your personal Brand?
      • Leadership Coaching: How does it help Leaders
    • October (2)
      • Are Independent Director’s required on the Board?
      • 'Ethics & Governance' lesson should start from school, says Federal Bank's Independent Director, Sankarshan Basu
    • September (3)
      • Grow with Governance: As an Independent Director ensure your voice is heard, says Apurva Purohit
      • Grow with Governance: Push for ESG agenda; pool CSR funds to maximise impact, says Ranganath NK, former MD of Grundfos Pumps
      • Grow with Governance: Boards should prepare companies for different risks, says National Insurance Academy's G Srinivasan
  • 2020
    • August (4)
      • WOMEN DIRECTOR-An Emerge
      • ARE YOUR BOARD MEMBERS SAVVY WITH FINANCIAL TERMS AND EXCEL IN FINANCIAL LITERACY QUOTIENT AS PER COMPANIES ACT 2013 MANDATES.
      • BOARD MEMBER SELECTION- A TASK OF PERFECTION
      • SME IPO – AN OPPORTUNITY TO CAPITALIZE YOUR BUSINESS
    • December (3)
      • Good or bad, Salary Increments always cause a heartburn among employees
      • Is Economic Progress Enough?
      • Emotional Intelligence
    • November (3)
      • Generating Wealth Beyond Money
      • "Agile Mindset for Leadership"
      • Tips for Aspiring Independent Directors
    • September (3)
      • Independent Director
      • Lean Thinking Boards
      • Corporate Governance & Women on Boards
  • 2022
    • August (1)
      • Liability of Independent Directors – An Important Aspect of Corporate Governance
    • February (4)
      • A Hero's Farewell: How to handle employee exits with dignity
      • Green Bonds: An Instrument for Financing a Sustainable Future
      • Tool for effectiveness of Board Committees - Ask Right Questions
      • Russia-Ukraine war and India’s Business Implication
    • July (2)
      • Stagnation or Evolution – Mindset Shifts of Boards when Company sees Stagnated Growth
      • Risk Assessment and Minimization Procedures – Role of Board
    • March (2)
      • A study on Sustainability Report of Container Shipping Companies.
      • India and The ESG impact of Crypto Currencies
    • May (1)
      • Independent Directors liability under GST
    • November (1)
      • Workplace Sexual Harassment and the Role of Board
    • October (2)
      • How many Boards are too many?
      • Women in Indian Boardrooms Vs Diversity = Inversely Proportionate
    • September (2)
      • Organizing for the Future – Important keys to becoming future ready
      • Are you ready to serve on the Board?