The government is streamlining the process of appointment of independent directors in Public Sector Undertakings (PSUs), a senior government official said today.
"We are in the process of shaping a note that actually gives timelines to each part of the process (for appointment of independent directors)," Department of Public Enterprises Secretary Bhaskar Chatterjee told reporters on the sidelines of an All-India Management Association function here.
He further said the note will be placed before Cabinet in the next three to four months.
As per market regulator Sebi's guidelines, it is mandatory for a company to fulfill the criteria for 50 per cent representation by independent directors on the board, if the chairman is executive, before getting listed on the bourses or hitting the capital market.
In case the chairman is non-executive, the rules demand that at least one-third of the board should comprise independent directors.
The Department of Public Enterprises (DPE) wants to expedite the process of recruiting independent directors for state-owned firms.
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At present, the appointment process is quite lengthy. It goes through a number of stages and sometimes the ministries do not respond on time and applications are held up for six to seven months at times.
The DPE is also focusing on improving the quality of non -official directors.
"One part of it (proposal) also relates to the quality of independent directors. We are also trying to broadbase the talent pool from which we draw independent directors, which will also include private sector people," Chatterjee said.
As of March, 2010, there were over 380 independent directors in PSUs, according to official estimates.
There were 246 central public sector enterprises in the country as of March, 2009.