The government has now made it "practically impossible" for political appointees to find a place on the boards of the public sector units (PSUs) as independent directors (IDs), a top official said.
"Now, we have worked out a system by which it is practically impossible (for political nominees to join PSU boards as IDs)," on the PSU boards, Secretary in Department of Public Enterprises Bhaskar Chatterjee told PTI.
He said stringent norms have been stipulated, as a result of which only persons with the government experience, domain expertise, finance or academic background can join as IDs of PSUs.
If you study the appointments of the past two years, you would not see a single case where a non-professional has been appointed as ID. Chatterjee said, the presence of people (as IDs) with simply political background has become "totally zero".
As per the norms, any unlisted company should have at least one-third of the directors on the board as 'independent directors'.
A listed company headed by executive chairman should have at least half of the directors as independent directors. However, the PSUs are facing shortages of IDs. "There is a shortage of more than 50 per cent independent directors in the country," said Chatterjee.
As on March 2010, there are over 380 independent directors in PSUs, according to official estimates, Chatterjee said, the department is mulling changes to reduce the time period for selection of IDs.
In case the administrative ministry is not able to name an ID, the DPE would step in and identify the same, he said.
