What should we expect from directors?

Our lawmakers are very adept at making gestures to show the electoral public that they are aware of, and are tackling, their concerns. One such is the requirement that half the boards of companies with executive chairperson should be independent (one third if the chairperson is non executive.) That''s good, as a first step, but only as that. As recent corporate events show, there is need for independent directors to be trained in nuances of law and to know their rights, obligations and liabilities.Further, there is need for them to be properly compensated for the same so that they can voice truly independent opinions. Merely laying down a criteria for board composition is not enough. Both investors and the government have come to expect more than what independent directors, as well as institutional directors, can deliver towards better corporate governance. And without it, we will not get, indeed are not getting, proper valuations of the businesses.
Valuations of RIL have fallen, relegating it to third place, after NTPC, in m-cap, and continuing discord is detrimental to the firm. S&P has put it on rating watch, though Crisil hasn''t. UTI Bank, which wanted to make a GDR issue to provide it with enough capital, is in the midst of a similar display of weakness by its independent and institutional directors, who have reportedly suggested an uncustomary splitting of the post of CMD . This has led to the offer to resign of the current CMD, who has been instrumental in making the bank a big success and keeping strong the UTI brand at a time when the parent was reeling from the problems of the US 64 scheme and had to be bailed out by the government.
Thanks to efforts of new UTI chairman, the bailout has become profitable for the government. Institutional nominees, though, often place the interest of the institutions they represent ahead of shareholders, creating a moral dilemma and a potential conflict of interest.
Governance is an issue at the Centre as well. Does anyone ever prioritise the use of public resources? Aren''t governments supposed to do that? Does anyone ever ask whether imposition of dividend payment to government by Railways does not result in less money being made available to avoid the sort of accident that took several lives recently?
India story looks good, but if concerns on governance leads to temporary cooling down of passion by foreign investors for India, correction would be desirable and an opportunity to buy.