Saturday, July 20, 2013

ICL RTI, Good Governance, Drirectors' equal privilege to transarency, so on...

Directors’ Right to Information

A post on the The Columbia Law School Blue Sky Blog highlights the significance of this decision as follows:

On the substantive matters, the ruling shows that decisions taken without proper notice to a dissident, or otherwise not in accordance with good governance practices, will be subject to harsh judicial scrutiny, and that the courts will not hesitate to interfere with corporate action apparently designed to interfere with an electoral challenge or a transaction undertaken to thwart a dissident.  The episode reaffirms that while well-counseled boards can create significant leeway to respond to dissident directors, they must be careful to establish a record of open and informed deliberation that facilitates the ability of all directors to fulfill their fiduciary duties.

Some of these principles of transparency and equality of information to directors .....
Non-executive directors are particularly in an unenviable position as they are not involved in the day-to-day functioning of the company.

<> To share own random thoughts >
"....It seems unreasonable to impose fiduciary duties and responsibilities on directors if they do not have access to information that is necessary for them to discharge those in the required manner..."
Answer-ability, transparency and right of access to information, and its ilk, are all profound ideological concepts, or expectations, so inter-connected and inter-twined as to have an important role to play in 'good governance'. In other words, without a healthy bundling or blending of these and putting into practice, good governance can only be expected to remain an idler’s day dream as ever. Inability to or denial of access to any such in-house info. , is, if strictly viewed, not to be mistaken to be a valid defence available to anyone with a fiduciary function , just as a non-executive director, if and when were to be confronted with a charge of having failed to discharge his responsibilities in the manner required or enjoined. The fiduciary responsibilities are vested in and hence expected to be equally shared, fulfilled, and burden borne by all directors, not excluding non-executive ones. On that premise, in order not to dilute the essence of 'good governance’, in any event, if unsuccessful despite the individual having  been vigilant enough, the ultimate remedy or right recourse seems to lie in a like course of action as resorted to by the aggrieved director in the reported court case.

No comments:

Post a Comment