The average board in the top thirty Indian firms has nine to twelve members and a rising number of independent directors, but more than half failed to appoint a separate chairman and a managing director and only four had functioning nomination committees, Icra said in a survey on Thursday.Icra’s survey of the 30 largest companies that comprise the BSE-Sensex, excluded banks and financial institutions. It used publicly available data for the survey, and concluded that there is a positive overall trend in Indian corporate governance, though ‘‘substantial progress needs to be made in several key areas.’’Areas of concern include criterion for selection of independent directors, financial literacy of audit committees, and linkage of pay with performance for directors.‘‘It is expected that, following the recent amendment to Clause 49 of the Listing Agreement, some of these issues would be taken care of,’’ Icra says.The survey found a wide divergence in the remuneration paid to independent directors across, and sometimes within, companies.Besides, only seven firms did not have a remuneration committee, though this is not a mandatory requirement under Clause 49, it finds. The problems areas, Icra says, remain in terms of independence of directors and nomination committees. ‘‘Only four firms had functional nomination committees, this may be considered a major negative from the government perspective, as it seems to point at the absence of a structured approach to selecting independent directors.’’Icra has also raised doubts on the ‘‘so-called’’ independence of the directors. ‘‘More than ten companies had independent directors constituting more than 50 per cent of the board. However, it must be clearly acknowledged that there is a limitation in evaluating. given that the survey was based entirely on published information available in the public domain,’’ Icra’s survey says.Boardroom findings• Average board has 9-12 members• No separate chairman and MD posts• Increasing number of independent directors• Financial literacy of audit panels a concern• Pay not linked to performance of directors• Few firms have a remuneration committee
