Standing Conference of Public Enterprises (SCOPE), the apex body of public sector undertakings (PSU), will be developing a matrix to develop professionalism in independent directors of state-run companies.
The aim is to drive and improve professionalism among independent directors and the matrix will have some of the elements from the Organisation for Economic Cooperation and Development (OECD) ideology, UD Choubey, director general of SCOPE, said at a press conference here today.
"A matrix is being developed which will evaluate their performance and it will be placed for government approval within three months," he said.
According to him, the matrix will determine the working culture of PSUs, including number of independent directors on boards, their succession plan, attracting talent and retaining them, selection process of independent directors, their domain expertise and accreditation.
At present, as per the Sebi guidelines half of the board members should be independent directors. However, SCOPE, on behalf of the entire PUSs, has been requesting the government to reduce the cap to one third.
To a query on separation of chairperson and CEO posts, he said it is not possible in countries like India where a PSU cannot afford to have two power centres. "The system was failure even in some of the countries in European Union. We have conveyed our reservations on this to the government."
According to him, there are over 249 PSUs in the country of which over 32 are sick and 30 loss-making. Lack of innovation and failure to adopt latest technologies are the primary reasons for PSUs turning sick, Choubey said.
He said 69 posts of CMD and 300 of independent director are still lying vacant in the PSUs.
