Voices of Change 8: JP Pathak, Certified Independent Director & Author
JP Pathak is an author, Certified Independent Director, and a Leadership Coach.
Our team spoke to him recently on corporate governance and independent directorship. Here are the excerpts from the interview:-
- How can independent directors improve corporate governance practices? Please share anecdotes/examples if possible.
JP Pathak: Well, in my opinion, Independent directors play a pivotal role in improving corporate governance practices. Their presence ensures checks and balances, fosters transparency, and helps align the interests of management with those of the shareholders. Here are some key ways independent directors can enhance corporate governance practices:
1. Strengthening Board Independence and Objectivity
Independent directors bring an unbiased and objective perspective to board discussions, free from internal pressures or conflicts of interest that can arise when directors are too close to the company or its management.
Let me share an example-
In the case of Satyam Computers (India’s Enron moment), the failure of independent directors to detect financial fraud was widely criticized. However, it highlighted the importance of having truly independent directors who could critically assess the management’s actions. In response, many Indian companies began strengthening the independence of their boards, with independent directors playing a more active role in monitoring company activities.
2. Ensuring Accountability of Management
Independent directors are responsible for holding the management accountable for its actions and ensuring that the company operates in a transparent manner. They can question management decisions, demand explanations, and push for corrective measures if necessary.
“During the 2008 financial crisis, many companies were scrutinized for lack of oversight. Citigroup, one of the banks hit hardest by the crisis, had independent directors who were criticized for failing to push management on risky business practices. In the aftermath, there was a stronger push for genuinely independent directors who could take an active role in questioning the risk strategies employed by management”.
3. Enhancing Board Governance and Leadership in the Indian Corporate World:
Improving board governance and leadership starts with transparency, accountability, and strategic foresight. Independent directors play a critical role here by offering unbiased perspectives and ensuring the board aligns with the best interests of all stakeholders. One way to enhance governance is by implementing structured performance evaluations, not only for the board but also for senior management. Encouraging diverse skill sets among board members — whether through expertise in finance, law, or marketing — will lead to more balanced decision-making.
4- Mitigating Conflicts of Interest: A Strategic Approach
Conflicts of interest, if not properly managed, can erode trust, compromise decision-making, and ultimately harm the reputation and success of any organization. Whether in business, healthcare, or governance, the presence of a conflict of interest can skew objectivity and create an environment where decisions are made based on personal gain rather than the greater good. Mitigating such conflicts is, therefore, a crucial aspect of maintaining integrity, transparency, and accountability within an organization.
The first step in mitigating conflicts of interest is to establish well-defined policies that outline acceptable behavior and delineate what constitutes a conflict. These policies should be communicated clearly to all employees, directors, and stakeholders. A comprehensive conflict-of-interest policy should detail examples of potential conflicts, such as personal relationships, financial interests, or overlapping business activities, and provide clear steps for disclosure and resolution.
Example: A pharmaceutical company might prohibit employees from holding financial stakes in any supplier or client that could influence their professional decisions. This policy ensures that procurement choices are made based on quality and cost-effectiveness rather than personal benefit.
Another example can be to promote transparency through disclosure
Creating a culture of transparency is vital in mitigating conflicts of interest.
Example: In board governance, independent directors should disclose any personal or financial relationships they have with entities doing business with the company. This allows the board to assess whether those relationships might bias decision-making, ensuring impartiality.
And most important- Once a conflict of interest has been identified, there should be a formal process in place to resolve it. Depending on the severity of the conflict, options might include recusing oneself from decision-making, transferring responsibilities to another party, or divesting from certain financial interests. This framework ensures that conflicts are managed systematically and fairly, minimizing disruption to the organization.
Example: In mergers and acquisitions, a director with a personal financial interest in one of the companies may need to recuse themselves from discussions and votes related to the deal to avoid influencing the outcome in a biased way.
There are many more ways in which Independent Directors can contribute to Corporate Governance Practices:
In the context of the Indian corporate world, fostering a culture of ethical business practices is essential. Boards should work closely with compliance officers and legal advisors to ensure the company adheres to regulatory standards and adopts global best practices. Regular training for board members on emerging trends such as sustainability, digital transformation, and innovation can empower leadership to make more informed decisions. Leadership succession planning is another area where Indian boards can improve, ensuring that the right leaders are in place to drive long-term growth and stability.
2. You are a respected figure in pharma marketing & leadership Please share your contributions as a senior leader to the domain
JP Pathak : Thank you for asking me this question and I take this opportunity to share my contributions as a Senior Leader in Pharma Marketing & Leadership
Over my 35+ years of experience in the pharmaceutical industry, I’ve had the opportunity to drive significant growth and transformation across multiple business functions. My contributions to pharma marketing and leadership stem from the ability to effectively manage the product life cycle of mega-brands, ensuring sustained growth and market relevance even in highly competitive environments. Successfully transitioning brands through their maturity stages has been a hallmark of my career, whether it’s through rebranding, repositioning, or tapping into unmet market needs.
Additionally, I have been a project champion in exploring new market opportunities in tier 4 to tier 6 towns — what I consider “real rural India.” This expansion into untapped regions has helped extend the reach of healthcare to underserved populations, contributing not only to company growth but also to the improvement of public health in these areas. By developing and training dynamic sales teams, I’ve ensured that our products resonate with both healthcare professionals and patients in these regions, often adapting strategies to address local challenges and consumer behaviors.
I have also been deeply involved in training and mentoring teams, focusing on driving peak performance, increasing team effectiveness, and reducing attrition. Through structured training programs, I’ve helped sales and marketing professionals become more agile, enabling them to thrive in an evolving marketplace while fostering a culture of leadership at all levels.
Over the years, I have played a pivotal role in shaping the growth strategies for several mega-brands, successfully managing their entire product life cycles. My expertise in exploring opportunities in tier 4 to tier 6 towns, which I call ‘real rural India,’ has not only expanded healthcare accessibility but also driven significant market growth. I have consistently led high-performing teams through training and development initiatives, fostering an environment of collaboration and innovation that has resulted in sustainable success for the organizations I’ve been part of.
3 How can we enhance Board Governance and Leadership in the Indian Corporate World?
JP Pathak : To elevate the standards of board governance and leadership in Indian corporations, several critical areas need attention:
Diversity in Expertise: Board members should not only bring varied professional experiences but also diverse perspectives. This can include leaders from different industries who can introduce fresh viewpoints and innovative ideas to the boardroom. As a senior leader, I’ve seen how bringing different skill sets — such as sales and marketing expertise — into decision-making bodies can dramatically improve corporate strategies and operational outcomes.
Strengthening Accountability and Transparency: The key to good corporate governance is fostering a culture of transparency and accountability. Boards should promote open communication, ensuring that all stakeholders — from employees to investors — are aware of the company’s goals, challenges, and strategies. Clear lines of accountability must be established, particularly when it comes to decision-making and performance monitoring
Foster Ethical Leadership and Corporate Culture
One of the pillars of strong board governance is promoting ethical leadership. A company’s board must set the tone at the top by demonstrating integrity and adherence to ethical standards. This approach encourages a corporate culture that values ethical behavior over short-term financial gains. As a senior leader, I’ve always believed that ethical leadership creates long-term value, enhances brand reputation, and strengthens stakeholder relationships.
Implement a Whistleblower Mechanism
A robust whistleblower mechanism is critical to identifying unethical practices early and ensuring that the company adheres to legal and ethical standards. The board should oversee the creation of secure and confidential channels for reporting unethical activities. Such systems protect employees and foster a culture where issues are raised without fear of retaliation. This helps in risk management and builds trust within the organization.
By enhancing these areas of governance — accountability, ethical leadership, and proper whistleblower mechanisms — Indian corporations can achieve greater transparency, integrity, and trust with their stakeholders, positioning themselves for long-term success.
