The NDA government would soon be directing all ministries not to appoint independent directors, who were selected by the previous UPA regime, in the boards of central public sector enterprises (CPSEs). Cabinet Secretary is holding a meeting on this issue on Monday to approve the proposal, said sources.
The NDA’s earlier strategy was that past selections should not be ratified by shareholders in the annual general meetings so that the selected persons — currently functioning as additional directors in the board — would have to discontinue and the post would fall vacant for re-selection by the Appointments Committee of the Cabinet (ACC).
However, since this would be a time-consuming process with each CPSE holding their AGM over the next 2-3 months, a decision was taken at the highest level to guillotine the entire previous selections through a directive so that the ACC could quickly approve fresh names for appointment by September-end.
New corporate governance norms that kick off from October 1 require at least one-third of the board should comprise independent directors where the Board chairman is a non-executive director and at least half of the board in case the company doesn’t have a regular non-executive chairman.
Non-compliance with the new provisions would delay the listing and disinvestment of government equity in some of the targeted CPSEs until the vacancies are filled. It could also result in some CPSEs getting downgraded from their present status of maharatna and navaratna, said sources.
- Shah Rukh Khan On Raees Clash With Kaabil: It’s Impossible To Have A Solo Release In India
- US-President Elect Donald Trump Named TIME’s Person Of The Year 2016
- O. Panneerselvam: 10 Things You Need To Know
- PM Narendra Modi Slams Opposition For Not Letting Parliament Function
- Nawazuddin Siddiqui On Working In Raees: Was Nervous To Shoot With Shah Rukh Khan
- Bathinda Dancer Murder: Video Showing Accused Opening Fire At Marriage
- 5 Lesser Known Facts About Sasikala Natarajan
- Congress Leader Shashi Tharoor’s Delhi Home Burgled: Here’s What Happened
- Reserve Bank Of India Keeps Repo Rate Unchanged Post Demonetisation
- Bigg Boss 10 Dec 06 Review: Swami Om Pees In Kitchen
- Lenovo k6 Power Video Review
- Bigg Boss 10 December 5 Review: Manveer Calls Swami Om ‘kachdaa’
- PM Narendra Modi Declared Winner Of TIME Magazine’s Person Of The Year – Reader’s Poll
- Paneerselvam sworn in as new Chief Minister of Tamil Nadu
- Tamil Nadu CM J Jayalalithaa Passes Away After Suffering Cardiac Arrest
They said the October 1 deadline was being used as a pretext for getting the Cabinet Secretary to issue the diktat to axe the past appointments and provide a route to the NDA government to fill up these vacancies with their nominees.
Independent directors are drawn from public men, technocrats, management experts, consultants and professional managers in industry and trade with a high degree of proven ability. New norms require that the criteria for their selection would have to be disclosed in the annual report.