corporate governance

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Commentary on Lodha Commission recommendations to BCCI – II


Chapter 2: Governance

The Lodha Commission identified the following problems with the BCCI’s governance structure.

  1. Concentration of power
  2. Lack of competence
  3. Overlap of diverse functions
  4. Zonal considerations
  5. No representation to players
  6. No representation to women
  7. No independent voice
  8. Unlimited terms and tenures
  9. No disqualifications

The President will no longer be all-powerful.

An Apex Council is to be formed and powers formerly vested in the President will be assigned to it.

The IPL Governing Council will continue to exist as a separate entity.

The BCCI will address lack of competence by bringing in professional managers and area experts.

There shall be only one Vice-President. The provision for having five VPs is to be scrapped.

The Apex Council will thus consist of the President, Vice-President,Secretary, Joint Secretary and Treasurer.

The council will have nine members: two additional Councillors (one male, one female) to be nominated by the Players’ Association to be formed, one to represent the Full Members of the BCCI, and one to be nominated by the Comptroller and Auditor General (C&AG) of India.

No member can be a member of the Apex Council for more than nine years, with a single term consisting of three years.

Additionally no one can be elected to the council for more than one term at a time. The same holds for nominated Councillors.

Ministers, government servants or post-holders in other sports bodies as well as persons over 70 are disqualified from being members of the Apex Council.

Comments:

The appointment of a woman member to the Apex Council is to be welcomed. This should help promote the women’s game in the country and a player representative will be able to give advice to the BCCI about the problems ailing women’s cricket.

The added four members nominated will bring in independent members thus adhering to good corporate governance principles.

The nomination of a member by the C&AG will help in desired oversight into the BCCI’s finances.

The provisions of this section are so much in line with the Draft National Sports Federation bill that it makes one wonder if the Commission used it as a reference document to frame the governance rulings.

The key differences are that the term of office recommended is four years as against three in the Lodha Commission, council members can serve two consecutive terms which would then be followed by a cooling off period of four years. The President is exempt from this rule in that he or she can hold office for three consecutive terms or twelve years.

Government servants are eligible to serve as Board members provided they get permission from their Ministry.

Corporate Governance


Corporate governance has been in the Indian news headlines quite recently in connection with the scam perpetrated by Raju on Satyam shareholders and employees. Interestingly,  Satyam was the recipient of numerous corporate governance awards. Just goes to prove that just because processes are in place, does not imply that the processes are being followed. The spirit of the law  is more important than the letter of the law. But then India is a nation that loves it’s forms, it’s idiosyncratic processes and customs,it’s  bureaucratic ways and any change is greeted with derision, disdain and shock. Processes are meant to be traditionalized, embedded into the culture of the company and not uprooted without a by your leave! Who minds it’s clutter?

For more laid-back news followers, Satyam was just another scandal in just another family-run business.Satyam despite all its protestations , was just that – a family-run business though it’s shares were listed on the Indian stock exchange and available via ADRs.The more engrossing and entertaining corporate scandal has been the IPL imbroglio and it’s many running installments in the Indian media rumor mill.

Now, the IPL has a governing council which is equivalent to a corporate board of directors. In theory, a board of directors is an independent body that oversees the management of the corporate body or entity. It is there to make sure that the right processes are adhered to, that due diligence is carried out while executing strategy and no hanky-panky or unethical acts are carried out by any of the top management honchos.

But in practice, this is easier said than done. Most corporate boards are appointed with inputs from the incumbent management and thus cronyism is the name of the game. The typical board is populated with members who thus tend to be hand-in-glove with top  management. This seems to have been the case with the IPL governing council. Despite the presence of luminaries such as Ravi Shastri, Sunil Gavaskar and M A K Pataudi on the governing council, the BCCI finds itself facing a scandal of gargantuan proportions with conflict of interest and high-handedness tarnishing the fabric of IPL governance.

Quote of the day:
If you can find something everyone agrees on, it’s wrong. – Mo Udall

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