SCOPE chief Behuria opposes SEBI listing agreement
New Delhi   04-Feb-2008
<b>Say 33% independent directors well enough</b> Standing Conference of Public Enterprises (SCOPE) has questioned the listing agreement of Securities & Exchange Board of India (SEBI). SCOPE chairman Sarthak Behuria argues that it is not necessary for a company's board to have 50% of members as independent directors as mandated under clause 49 of the listing agreement. "One-third is a good enough number. I personally do not think that there is a need to have half the member of the board as independent directors, said Mr Behuria, who is also IndianOil chairman. He said on the sidelines of a concave on corporate governance organised by SCOPE on Friday. He added that the government has started the process of appointing independent directors for IndianOil and other companies, and the process is expected to take about one year. Even under the framework of the guidelines on corporate governance issued by the department of public enterprises, PSU firms need to have only 33% of their board member as independent directors. Incidentally, IndianOil is among the six listed PSU companies along with ONGC and GAIL, who are short of the required number of independent directors on board. SEBI has also served notices in this regard to these companies. However, the petroleum ministry has asked the market regulator to give some more time, as appointment of independent directors is a time-consuming process. Secretary in the ministry of heavy industries and public enterprises RS Panda said that the government has started the process of appointment. He, however, added that only six out of the 41 listed CPSEs are short of the required number of independent directors, which is much better than what is the case with the private sector listed firms. While IndianOil has six independent directors against the requirement of eight, BHEL has five against the required six. GAIL has three independent directors against the requirement of six. In all these companies the number of non-official directors is about 33%.