What's Making the News
In what is likely to have a long-term impact in improving the quality of corporate governance in the country, the Indian Institute of Corporate Affairs (IICA), under the aegis of the Ministry of Corporate Affairs(MCA), Government of India, has mandated compulsory certification for independent directors (IDs) of listed companies. Albeit with some caveats, the changes were put forth recently by the top echelons of the Ministry of Corporate Affairs under the laid down provisions of the Companies Act of 2013.
The amendment mandates compulsory certification for independent directors of listed companies, with under ten years of experience, along with aspiring independent directors. The law has given reprieve to those with more than ten years of cumulative experience as IDs, making it a matter of choice for them to obtain the certification and not compulsion.
The government has also decided to set up a dedicated database of existing independent directors, something akin a repository which is expected to act as a one-stop directory for companies to scout for independent directors. It would enable companies to zero-in on existing IDs and individuals willing and resourced-enough to take a plunge in the corporate world as IDs. While IICA is the nodal body undertaking this government initiative, its department called 'corporate governance' is responsible for launching and executing the project.
Who Is an Independent Director?
For the uninitiated, ID is a member of a company’s board and does not have any material interest but sits on the board to improve corporate governance. The provision is aimed at keeping a check on unsavory corporate activities, bringing detached and ethical governance in the midst.
How Will It All Work?
Every existing ID is required to register himself/herself on the databank in the next three months' time (The databank portal is being developed and maintained by IICA). The exception being IDs with over ten years of experience. IDs need to undertake the assessment in under a year after registration, failing which they stand to lose their recognition and would no longer qualify to represent their companies. The assessment will judge a candidate's proficiency in all relevant topics concerning corporate governance, including company law, securities law, basic accounting, and corporate governance, among others.
The IDD Portal features an Integrated Learning and Management System (ILMS) and acts as an e-learning platform to acquire knowledge on relevant subjects through learning modules. It would assist the candidates in assessing their understanding of the company's operations, compliance mechanisms, and regulations that govern it.
Where Does Mercer|mettl Come In?
Mercer|Mettl has been exclusively mandated to provide these assessments to existing and aspiring IDs through its robust and time-tested platform. The IDs have the option of deciding on the preferred time-slot on the web platform.
The Mercer|Mettl platform will ensure top-notch AI-based remote proctoring and human proctoring to provide secure and authenticated assessments. The convenience of undertaking the test online, from the comfort of the candidates’ location of choice, and the preferred time, will provide them unmatched comfort. The platform has high-degree of scalability, allowing for large-scale proctoring of assessments, therefore ensuring that even a large number of applicants can take up the assessments simultaneously. Further, the test is QR code enabled for e-certification, for security, and one receives a score obtained in the assessment.
The candidate's conduct will be closely monitored, maintaining the sanctity of the undertaking, without being excessively probing. It bodes well, given that most of the candidates would be seasoned professionals with years of experience and good academic records.
Mercer|Mettl is also General Data Protection Regulation (GDPR) compliant, besides being ISO 27001:2013 & 9001:2015 certified. The company is TRUST-E certified, too, and caters to Safe-Harbour regulation requirements. All of it ensures maintaining the highest standards of privacy and adherence to best industry practices.
A company has a fiduciary duty towards its stakeholders, and Mercer|Mettl’s involvement in this important initiative is expected to add more value to the broader ecosystem, enabling IDs to undertake their responsibilities more efficiently. With a more enlightened group of IDs at the helm of affairs, the state of corporate governance itself will likely turn for the better. And that Mercer|Mettl is slated to play a significant role in this important and exclusive undertaking only reaffirms the credibility of its pool of solutions and the robustness of its time-tested platform.
This government mandate for the organization comes at the back of a highly successful initiative, where Mercer|Mettl only recently scripted history by conducting 1,00,000+ proctored assessments in a single day! Truly unprecedented in scale and penetration, the exercise covered a vast terrain, from populous cities to the distant corners of Nagaland, Mizoram, Dadra and Nagar Haveli, Jammu and Kashmir, and Tripura, making it truly a pan-India initiative. It is a significant milestone and showcases the company’s ability to undertake hitherto unheard of technology-driven proctoring assessment projects, in scale and scope, and executing them with elan. These developments firmly establish Mercer|Mettl as a formidable player in the assessment ecosystem. The government’s decision to appoint the organization to undertake this high-stakes initiative speaks volumes about its credibility in the marketplace.
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