As many as 17 listed PSUs, including blue chip entities like Indian Oil , BHEL and SAIL do not have the requisite number of independent directors, an important tool of corporate governance, says a CAG report tabled in Parliament today.
Describing independent directors as the most significant instrument of corporate governance, the CAG report said, only they can challenge the decisions of the management and protect the interest of shareholders and other stakeholders.
As per Clause 49 of the listing agreement between the company and the stock exchange, one-third of the board members should be independent directors provided the company is headed by a non-executive chairman.
In case the board is headed by an executive chairman, at least half of the board should comprise independent directors.
"Out of 47 listed government companies, the boards of 17 companies did not have the required number of independent directors," said Comptroller and Auditor General (CAG) report.
more at:
http://economictimes.indiatimes.com/news/news-by-company/corporate-trends/IOC-BHEL-SAIL-do-not-have-required-independent-directorsCAG/articleshow/7078037.cms
Friday, December 10, 2010
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