New norms on independent PSU directors soon: Patel
10 Mar 2011
Expressing much-needed concern about the quality of independent directors on the boards of public sector enterprises, the government said yesterday that it would come up with fresh guidelines on the matter.
''There is a need to upgrade the quality of independent directors in the boards of PSUs,'' minister for heavy industries and public enterprises Praful Patel told reporters in New Delhi.
Apart from improving the quality of independent representation, the government would also come up with guidelines to simplify succession, he said.
"I want to make one categorical assertion that the quality of the members who are appointed on the boards as independent directors will have to be upgraded," Patel (the former civil aviation minister who lost that portfolio recently) said after releasing the Public Enterprises Survey 2009-10.
The minister pointed out that many PSU boards are being represented by people who have little or no domain expertise and do not contribute to the functioning the company.
"Therefore the department of public enterprises (DPE) will make some guidelines and make some assessment in consultation with our companies as to what is the contribution of the independent directors on the boards and if need be we can suggest remedial measures," the minister said. "So we want to have a qualitative assessment of the members who will be joining the board."
