PSUs need 900 independent directors

Over 75 per cent of the 1,200 posts meant for independent directors in 240 state-owned enterprises are lying vacant.

This is despite the drive to appoint 130 independent directors on boards of listed public sector companies by December.

As per data available with the department of public enterprises, over 900 non-official directors have to be appointed on the boards of PSUs. It is mandatory for 49 listed PSEs to comply with the Securities and Exchange Board of India's Clause 49 listing norms by December 31.

But, the government is finding its hands tied when it comes to unlisted PSUs. No deadline was set when the guidelines were issued in 1992.

As per DPE guidelines issued in March 1992, the number of such non-official part-time directors should be at least one-third of the actual strength of a board. The appointment of directors on boards of PSEs is made by administrative ministries or departments in consultation with the DPE.

"Citing poor financial health, most PSEs have not bothered to fill up positions. They say it is too expensive," a DPE official said.

It was the administration's fault if vacancies were not filled up, said SM Dewan director-general of Standing Conference on Public Enterprises (Scope).

The DPE and Scope have circulated a list of potential candidates who can be appointed as independent directors on boards of PSUs.

In case of "navratnas" and "mini-ratnas", appointments of non-official directors are made by a search committee comprising the chairman of the Public Enterprises Selection Board, secretary of DPE, secretary of the administrative ministry or department, and four non-official members.

Most PSE boards are poorly manned. There are over 100 vacancies in top executive positions in 240 PSEs.

It was not surprising that the positions of independent directors were neglected, officials said.

The United Progressive Alliance government's common minimum programme had identified strengthening of PSUs and professionalising their management as focus areas.