The government today said the central public sector enterprises will have to mandatorily follow corporate governance norms, which was introduced on a voluntary basis in 2007.
In June 2007, the government introduced the guidelines on corporate governance for central public sector enterprises (CPSEs), which were voluntary in nature for a period of one year on trial basis.
"The guidelines have now been made mandatory and are applicable to all CPSEs," an official statement said. The decision was taken at a Cabinet meeting today.
The guidelines cover issues like composition of boards of CPSEs, audit committees, subsidiary companies, disclosures, code of conduct and ethics, risk management and reporting, the statement said.
The guidelines have been modified and improved keeping in view the experience gained during the experimental phase of one year and include additional provisions relating to monitoring the compliance of guidelines by CPSEs and formation of remuneration committee, it added.
