ICSI cites lapses at IndiGo; calls for stronger corp governance

New Delhi, Dec 9 (PTI) Company secretaries' apex body ICSI on Tuesday cited the governance lapses at the country's largest airline IndiGo and called for stronger governance practices to ensure proactive risk identification, timely intervention and transparent communication.

The Institute of Company Secretaries of India (ICSI) has more than 78,000 members.

In a statement, the institute flagged the "recent governance lapse highlighted by the IndiGo incident".

ICSI President Dhananjay Shukla said the IndiGo incident serves as a reminder for corporates and professionals to ensure sound governance frameworks that can create as well as preserve shareholder value along with public trust.

It is not often that ICSI publicly mentions governance issues at a company.

IndiGo has been facing significant operational disruptions for the last one week, resulting in hundreds of flight cancellations and delays. The situation is stabilising now.

Lack of proper planning in implementing the new flight duty norms is one of the key reasons for the disruptions.

IndiGo's parent InterGlobe Aviation's board has set up a crisis management group to monitor the situation.

The company's Board of Directors is doing everything possible to take care of the challenges faced by its customers and ensure refunds to passengers, a statement said on Tuesday.

ICSI has called for an urgent need for strengthened corporate governance practices across India Inc., following the government's strong sentiment on the recent IndiGo incident, the institute said in the statement.

Underscoring the need for a deeper accountability at the board level, ICSI said that besides being fundamental to compliance, robust governance ensures preparedness, accountability, and crisis responsiveness.

Reiterating the vital role of independent boards, effective risk management and vigilant stakeholder oversight, ICSI also urged companies to align their board processes in the interest of all stakeholders and "enable proactive risk identification, timely intervention and transparent communication".

ICSI Secretary Asish Mohan said that corporates should revisit their structures and processes in the interest of stakeholder protection and long-term sustainability, because corporate governance is a continuous responsibility. PTI RAM HVA