The Unit Trust of India (UTI) plans to appoint outside experts as its nominees on the boards of companies in which it holds substantial equity. The nomination of non-UTI experts is designed to ward off fears of a conflict of interest.
A suggestion to this effect will soon go to various companies.
"There can be a conflict only if the nominee is a fund manager with us. If drawn from a pool of outside experts, the nominee will strengthen the board," UTI chairman P S Subramanyam told Business Standard.
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UTI's current move had generated much heat sometime ago. Fears of a conflict had been expressed since the mutual fund, the biggest domestic player in the capital market, would be privy to the inside information of the companies through its nominees.
Subramanyam said the appointment of nominee directors aimed at maximising its unit holders' value and promoting corporate governance through qualitative interaction with companies.
"Broadly, every company has accepted the need for a meaningful interaction. Even our earlier communication to companies seeking representation on their boards was not in the nature of a demand, but only a suggestion," Subramanyam said.
The UTI has also decided to phase out assured income schemes in a year in line wi