Manju Agarwal, a former deputy managing director of SBI, recently resigned from the board of CMS Info Systems, shedding light on the challenges faced by independent directors managing multiple board roles. Agarwal’s decision to step down from CMS Info Systems coincided with her resignation from Paytm Payments Bank Limited (PPBL), where she held a position as an independent director, according to a report by Economic Times.
Agarwal had initially resigned from PPBL but sought reappointment on the board of CMS Info Systems, drawing criticism for what was seen as a selective “preoccupation” given her departure from PPBL. Faced with scrutiny and accusations, Agarwal ultimately resigned from the CMS Info Systems board just before the postal ballot voting on her reappointment concluded on March 1, as per the ET report.
The sequence of events indicated that Agarwal’s attempt at reappointment faced challenges and led to her eventual departure from the CMS Info Systems board.
The timing of Agarwal’s exit from PPBL, coinciding with the Reserve Bank of India’s (RBI) ban on Paytm Payments Banks Limited, raised questions among corporate governance experts. While Agarwal cited “personal commitments” as the reason for leaving PPBL, her continued involvement on the boards of eight other companies, including listed entities like Glenmark Life Sciences and Polycab India, attracted scrutiny, according to the report.
Proxy advisory firm Stakeholders Empowerment Services (SES) questioned Agarwal’s selective approach to her “personal commitments,” arguing that her resignation from PPBL held little significance as the company was already set to cease operations within 28 days due to RBI’s restrictions. SES also criticized Agarwal’s perceived failure to protect the interests of minority shareholders at PPBL, raising doubts about her adherence to the duties expected of an independent director, the report explained.
The situation has reignited discussions around potential conflicts of interest and time constraints faced by independent directors holding multiple board roles simultaneously. Agarwal’s extensive experience in banking and finance made her a sought-after candidate for various board positions. However, her challenges at PPBL have raised questions about her effectiveness as an independent director.
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