At the round table, Leo Puri of consultancy firm McKinsey & Co, Gery Ford of AMP Asset Management Company of Australia, Ralph Heuwing of Boston Consultancy Group and CII consultant Omkar Goswami made presentations before finance secretary Vijay Kelkar.

The round table was attended, among others, by UTI chairman PS Subramanyam, Securities & Exchange Board of India chairman DR Mehta, HDFC chief Deepak Parekh, National Stock Exchange chairman RH Patil, former State Bank of India chairman MS Verma, former Industrial Development Bank of India chief SH Khan, company affairs secretary TSR Krishnamurthy, corporate chieftains JJ Irani and SK Birla and Infosys Technologies MD and CEO NR Narayana Murthy.

According to sources who attended themeeting, the CII paper was categorical that the FIs' nominee directors should have no special role to play. "As lenders, the FIs should safeguard their interests through adequate securities and covenants and not through board representation," CII consultant Goswami reportedly pointed out. It was also noted that there was a need to resolve the conflicts of interests arising out of the nominee directors' dual responsibilities as debt holder and equity holder.

The CII paper too was not in favour of the special role of FIs' nominee directors on corporate boards as shareholders' representative. In effect, it has opposed UTI chairman PS Subramanyam's attempt to get board representation on those corporate boards where it has 5 per cent stake.

The CII view on nominee directors is in sharp contrast to financial institutions' 19-point agenda to enable nominee directors to play the role of "active interventionists" and protect the interests of shareholders. The institutions had some time back circulated the agendato nominee directors to ensure corporate governance.

In order to enhance the effectiveness of the nominee directors, IDBI had suggested that there should be proper balance between the strength of promoter directors vis-a-vis independent directors including institutional directors on the board.

Corporate chieftains who attended the round table conference opposed any move to "over legislate" the issue. They were reportedly against any code of corporate governance to be imposed by the finance ministry or the institutions and instead preferred the code to "evolve" on its own. Sebi chairman DR Mehta also was in favour of "regulation" and not "legislation".

The capital markets watchdog has formed a committee under the chairmanship of Aditya Birla group chairman Kumar Mangalam Birla. The panel will have its first meeting on June 4. Representatives of the finance sector who attended the meeting said under condition of anonymity that the appointment of nominee directors should not be "mandatory". "There areother ways of monitoring a company and pushing for a berth on the board is no solution," one source said. However, there has been a consensus that there should be a mechanism to "measure" the performance of the board.