82% listed CPSEs don't have mandated independent directors: CAG report
New Delhi, December 29, 2022
Independent directors ensure integrity of financial information, report unethical behaviour
The Comptroller and Auditor General of India (CAG) has raised concern over the high number of vacancies for the post of independent directors in 59 of the 72 (82 per cent) listed central public sector enterprises (CPSEs).
While no Maharatna company has the mandated number of independent directors on its board, CPSEs such as Coal India Ltd (CIL), NHPC, Mahanagar Telephone Nigam Ltd (MTNL), and REC have not appointed an independent director.
The Companies Act, as well as the guidelines issued by the Department of Public Enterprises, mandates that in case the chairman of the board is an executive director, at least half the board should have independent directors.
The CAG recommended the boards of directors of the listed CPSEs ensure compliance with these guidelines and regulations to bring in better transparency and accountability in their functioning.
“The Administrative Ministries/Departments may ensure submission of quarterly compliance reports by listed CPSEs as prescribed in DPE/SEBI guidelines/regulations,” the CAG said in a compliance audit report tabled in Parliament for the year ended March 31, 2021.
[The Business Standard]