Accident liability of independent directors

An article published in Deccan Chronicle today (24.06.2010 Thursday) states that CII asked government to insert a clause in the Companies Bill 2009 to exclude independent directors from any criminal liability for offences commited by the company, saying that they are not involved in day-to-day running.

Though they are not in operation, but any influence of these independent directors in the decision making process of business towards profits, cost cutting measures, etc will have a direct bearing on the safety measures followed by plant operators and thus they are involved indirectly in day-to-day running of the plant. Therefore, it is not correct to exclude them from liability. If they are like ordinary public shareholders and not consulted or involved in any decision making process (in finance, technical,...), then they can be excluded.

All those who are involved in decision making of financial aspects should be made liable for accidents. The deactivation of safety systems at Bhopal was done to cut business losses with the assumption that a plant not in operation does not require maintenance of safety systems. The decision was made because of lack of technical knowledge on what can go wrong.

Any financial decision on plant operations should be supported by a report from operations in-charge (who should be a technical man) that was discussed by all directors and approved.