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Board of directors is ‘collectively responsible for the long-term success of the company’ according to the UK Corporate governance code (similar formula might be found in other corporate governance regulations as well). The board sets company’s strategic objectives and ensures that all necessary resources are in place to meet these objectives and reviews management performance regularly.In public listed companies majority of board members should be independent non-executive directors, who are not full-time employees and do not participate in running the company on a daily basis. In fact the board meets only several times a year (e.g. 6-8 meetings) to decide on high level matters, such as structural and constitutional issues, governance, approval of overall strategy, approval of significant transactions, mergers, acquisitions, joint ventures, capital expenditure, etc.You may find that large companies may even have only two executive directors on board (CEO and CFO) with all other members (say 8-12 of them) being non-executives. The board delegates all decisions on operational running of the company to the CEO. The CEO is accountable to the board and can delegate any of his powers to other executive officers.In non-listed companies the composition of the board might be different and its role may have more emphasis on operational matters.Chairman is responsible for running the board: setting the board’s agenda, fostering constructive relations between executive and non-executive directors ensuring sufficient time available for discussion of all items on the agenda.Many corporate governance codes suggest that Chairman should be an independent non-executive director and that roles of Chairman and CEO should be split. However in practice, where such requirement is not enforced by law, by listing rules or other regulations, the roles of Chairman and CEO/President can be performed by one person. There are arguments in favour and against of both arrangements.CEO/President (actually the name depends on the company’s articles of association) is the most senior executive director. He is accountable to the board and responsible for proposing strategy and delivering the strategy as agreed. He delegates part of his powers and decision-making to executive team members.President of <segment of operations>/Executive/Managing director is member of executive team who reports to the CEO and is responsible for implementing company’s strategy in his area (e.g., group of products, geographical area, functional area, etc.) In public listed companies executives may not always be members of board of directors, but they may form a separate executive committee instead.Founder/Co-founder is a person who has started the company, but may not necessary retain any control over it in future. He or she usually holds a position of CEO/President at early stages and may keep it later as well, even with changing ownership structure. The founder may retain a controlling number of shares if he or she has a strategic interest in business. Alternatively they may sell the shares and have no further relationship with the company.Owner is person who owns company shares. In start-ups these are usually founders/co-founders. As the company grows larger and attracts new investors the ownership structure will change. Public listed companies may have thousands of individual and corporate shareholders as their owners.Promoter is a person who helps to raise funding for a company, usually when it is being formed. It can be an investment banker or an underwriter.

These days alleged fraud perpetrated in is being shared on social platforms & news items. The amount involved in the alleged fraud is Rs. 11,500 crores approx. but everyone is not aware about the way it has happened.So, let us discuss the modus operandi & facility sanctioned by PNB in alleged Fraud:**For the purpose of this article, Foreign Bank means “Foreign branch or correspondent of an Indian Bank”Before proceeding further, we should know about the LoU i.e. Letter of Undertaking:Letter of Undertaking (LOU): In simpler terms, it means an agreement between the following:1) The person who is importing some goods (importer) from foreign market and2) An Indian bankThe process of LoU is as follows:1) An importer, who wants to import some goods will need foreign exchange (foreign currency) for the payment either in advance or in the shape of Letter of Credit or LoU.2) That importer will then approach an Indian bank of his choice (where he is having the account) and ask the bank for the payment on his behalf.3) The Indian bank will ask for the sufficient collateral security/cash margin etc. and issue a letter of Credit or letter of undertaking tat which strength the importer imports the goods under LC or LoU.4) The supplier supply the goods to the importer and then approach his bank for the payment and in turn the foreign bank will approach the Indian bank for the payment.5) The Indian bank will pay the amount to the foreign bank and then will approach its client (importer) for the payment.If payment is received the process is completed.NOTE: As per the guidelines of the RBI, an Indian bank can issue LoU for maximum period of 90 days.Now what has happened in this case:The accused importers approached the PNB (Mumbai Branch) for the agreement regarding LoU and the bank had issued the same to the importers after signing the agreement.There were two major flaws in the agreement:1) As per news items, the collateral security was missing i.e. the agreement was entered without the consideration of any security. While PNB stated that they asked importers to increase the margin to 110% as per guidelines but parties refused on the grounds that were being allowed for many years, so, in view of the track record it should be reduced.2) The LoU was issued for 1 year i.e. they had violated the directions of Reserve Bank of India because the maximum period for which it can be issued is 90 days. None of the banks in funding raised voice against this violation.LoU are conveyed through SWIFT. Let us understand functioning of SWIFT.Meaning of SWIFT: Society for Worldwide Interbank Financial Telecommunication code.It is an internationally-recognized identification code for banks around the world.SWIFT codes are most commonly used for international wire transfers and are comprised of 8 or 11 alphanumeric characters.Working of SWIFT:Whenever an Indian Bank issues LoU then the Bank has to communicate about the same to the foreign bank of the supplier via SWIFT that they (Indian bank) has undertaken the guarantee for the payment of money on behalf of importer.Before communicating the same,the Indian Bank has to record this transaction as a Liability in their books of accounts. But these are not operated through FINACLE SYSTEM of Banks widely known as CBS plateform.Modus operandi of the case: The Role of Banks & others in the alleged fraud:Some of the officials of PNB executed a flawed agreement with the intention of the alleged fraud for their vested interests & misused their positions.The LoU was issued in violation of the manual of bank, law and the mandatory guidelines of RBI communicated to the foreign bank that PNB has undertaken the guarantee for the payment.But no such accounting entry was booked/recorded as Contingent Liability in the books of accounts of the bank. This means as in reality there was no such liability or contingent liability of the PNB for the payment. Hence, the LoUs were continuously issued without sufficient Col. Security/Cash margin beyond the vested powers of anyone.When the foreign bank approached the Punjab National Bank for the payment then PNB had checked their books of accounts and denied the payment as no such accounting entry was there in the books.But in reality, the foreign bank was in the possession of fake Letter of Undertaking but through SWIFT mode, which can’t be denied.The MD of PNB himself approached the enforcement directorate & CBI so as to find out what exactly happened and from the investigation the whole fraud was detected.The fraud could have been prevented: Check & Balance:Branches are not having staff, well equipped in FOREX knowledge, so BMs have to depend at only one person. That is why Mr. Shetty was not transferred against transfer policy even. Likewise, people having knowledge of big projects funding are very few. So it is a systemic lapse.All the branches are equipped with concurrent Auditors, who are transferred frequently. Therefore, it must have been looked into by them. They are eyes & nose of Head Office (Inspection) & have instructions to report such matters directly to HO. Most of them are not having knowledge of FOREX. & avoid to look or learn it. So it is a systemic as well as a human lapse.The Indian Banks like SBI & foreign banks/ foreign correspondents should have examined properly that the LoUs were issued for more than 90 days and it was in violation of rules. But they were receiving payment so kept mum. They are also responsible.As per CVC directions, the BM & Administrative Authorities should have an eye on the living standard of all officers during their visit. When alleged perpetrator of fraud Mr. Shetty & ors. were engaged in it they must be heavily obliged by the parties. Whenever, we receive illegal money/ gifts/ jewelery, it is apparent to everyone as we purchase/ construct lavish house/ spend on lavish consumer durables/ marriages/ parties/ tours/ heavy fees of IITs/ IIMs etc. The Officers have to submit a statement of asset & liability, which is on line for last 6–7 years. Minimum 10% of total returns are checked at random basis by vigilance department.Complaints against AGMs & above are registered with CVC also. His department monitor the bank through CVO, who is from another bank. So Banks have a lot of CHECKS & BALANCE SYSTEMS BUT short cuts & deliberate human errors of omission & commission & committing systemic lapses are main reasons of this scam.Banks should recruit & post separate cadre of foreign exchange experts for foreign exchange Authorized branches and they require constant up gradation of skills.In social media it is reported that in July 2016 the matter was brought to the notice of Prime Minister Modi and his PMO and the same was marked by PMO to ROC. But the matter was closed by ROC without any reference to the complainants. The complaints were made in 2016 by the employees of Geetanjali to the Maharashtra police, Fraud cell CBI, ED etc but no action was taken by any agency.New Delhi: At an Allahabad Bank board meeting on 14 September, 2013, in a New Delhi five-star hotel, on the agenda (No 4/6) was a proposal to sanction a loan worth Rs 50 crore to Gitanjali Gems owned by Mehul Choksi, the maternal uncle of Nirav Modi. Both those men are now under the scanner of enforcement and investigative agencies for duping Punjab National Bank (PNB) of more than Rs 11,300 crore.Dinesh Dubey, former government nominee director on the Allahabad Bank board, had opposed the proposal and presented a dissent note arguing that Gitanjali Gems should first return Rs 1,500 crore loan given to it earlier before a fresh loan amount could be cleared. His dissent was met with silence and the meeting proceeded to the next agenda on the list. When Dubey learnt that the minutes of the meeting were to contain an approval of the loan to Gitanjali Gems, he became furious. Four years after that meeting, in the aftermath of the unearthing of a series of fraudulent transactions that investigating agencies have traced back to Modi and Choksi, Dubey, a journalist, agreed to talk to Firstpost about the nature of the scam, corruption in the banking system and how the government of the time, the Congress-led UPA, turned a blind eye to illegitimate loans sanctioned to the two diamond merchants."When I opposed the Gitanjali Gems loan proposal, my fight with Allahabad Bank board got really intense and dirty. They tried to persuade, mollify and even threaten me but I said such loans to the corporates without recovery will only add to more non-performing assets. I also wrote to the Reserve Bank of India and secretary, financial services in the Ministry of Finance in my effort to warn them of a massive scam looming large. My request was to take immediate preventive action and keep a watch on all the companies linked to Choksi's firm, as they were accumulating loans without making payments to the bank," Dubey said.In his email to the then deputy governor of the RBI, KC Chakrabarty (Ex. CMD of PNB), Dubey had alleged: "... a meeting of MCBOD of Allahabad Bank was held on 14 September, 2013. Regarding agenda item No 4/6 pertaining to M/S Gitanjali Jewelers for sanction of Rs 1500 cr+50 cr. I have not given my consent. But, they ignored my dissent note and sanctioned the loan. This is for your information and necessary action please."The UPA government in August 2012 appointed Dubey as the director (on the Allahabad Bank board) but things really turned turtle for him after the 14 September meeting. He told us he was "hounded and harassed" for putting up dissent notes on loan proposals that he suspected had potential to turn into bad loans. Incidentally, Allahabad Bank's Hong Kong branch is one of the banks that financed Modi."I had told the board that Choksi and his firm will turn into a big scam one day. Even if they had listened to me, this scam could have been avoided. I remember the present managing director of PNB was then serving as the general manager with Allahabad Bank and he was aware of what was happening inside the shadowy walls of the board meeting," Dubey said.After flagging his dissent, Dubey claimed he was pressured by various government agencies. "The top officials in the Ministry of Finance and at Allahabad Bank wanted me to resign. I was told to mend my ways. I said the government had appointed me to keep a watch on the bank's activities and prevent any wrongdoings. If I can't do my job, it is better I should go. Then, I was told if I was ready to put up my resignation I must highlight that I was doing it for health reasons. I did that and resigned in February 2014," he added.But before his resignation, Dubey wrote to the finance ministry, raising the issue of loans to Gitanjali Gems. It was November 2013 and Dubey once again put up a dissent note, rattling the board members and chairman of the bank.In his letter to the then finance secretary, Dubey said: "On Friday, 22 November, 2013, a meeting of MCBOD and other four committees and also a board meeting was held at Kolkata at the Grand Oberai Hotel. In the board meeting, there was an agenda regarding Geetanjali Jewellers. This agenda had already appeared in past board meetings more than four times, and every time I had expressed my dissent. But, this Agenda was again brought in this meeting for approval. The CMD told me to give my consent to pass it, but I refused and again expressed my dissent note."He further noted: "I have never seen in my forty years' journalism career such type of below-dignity work, misuse of office and corruption. I would like to request you for some changes in guidelines. When the management has powers to approve the loan of up to Rs 400 crores, then why such cases are brought to board meetings? It is very clear that just to save them from any inquiry and legal action, in name of rectification and deviation, they bring such cases for board approval... when the board approves this, they are free from any legal inquiry or administrative action on behalf of the board."Dubey, who witnessed the creation of the scam, is of the opinion that it "involves many more officials and their linkages could even tie the higher-ups in the government".Accused Parties: 1) Nirav Modi, 2) Mehul Choksy, a Partner of Nirav Modi3) Ami, Wife of Nirav Modi reportedly from Ambani family, 4) Nishal, Brother of Nirav ModiBank Personnel who were involved: 1) Gokulnath Shetty 2) Manoj KharatSO, THE REAL STORY MAY OR MAY NOT BE SURFACED. APPARENTLY, THEIR MAY BE INVOLVEMENT OF GOVTS., BUREAUCRATS, MONITORING AGENCIES, REGULATORS, VARIOUS BANKS, IGNORANCE OF STAFF, INDUSTRIALISTS ETC. MANY DOCUMENTS WERE NOT CREATED EVER SO JUDICIAL PROCESS MAY BE DIFFICULT. NOW WE SHOULD WAIT FOR CONCLUSION BY VARIOUS AGENCIES, WHO ARE UNDER PRESSURE.

It depends on what office you want to run for.I was an elected official in my small town for many years, winning 13 elections and losing 2.The way that I recommend for a person to become a City Commissioner is to start as a board member on one of your city boards.Most cities have a variety of Boards, Planing, Zoning, Beautification, Code Enforcement, Parks and Recreation, and more. The boards are usually designed to be populated by ordinary citizens, which means that you don’t have to be an expert.The process of being appointed to a board varies from place to place, but in general you place an application with the city and if they like you, you get appointed. The way to become liked is by getting involved with your city through their volunteer programs. It also helps to attend the City Commission meetings, and introduce yourself to the Commissioners. (One mistake that newbies make is to become a gadfly at the meetings, complaining about the actions of the Commission, and speaking on every agenda item.)Good Luck!