IOC, BHEL, SAIL do not have independent directors: CAG
Bhopal   10-Dec-2010

As many as 17 listed PSUs, including blue chip entities like IndianOil, 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.

The other important listed companies, which do not have requisite number of independent directors on their boards include NTPC, Power Finance Corporation, Hindustan Petroleum, Bharat Petroleum and Bharat Electronics.