PSU’s Flout mandatory Corporate Governance norms: Move towards Privatisation
The central government stipulates that there must be at least two minimum independent directors of public corporations. According to the report, several large companies, such as Coal India, Nalco, REC, Hudco, and Cochin Shipyard, did not even have a single ID on their boards as of December 31, 2020. Even though SEBI made it obligatory in 2019, most businesses do not have independent female directors. This continuing absolute negligence of the governance level by large parts of CPSEs contributed to the low competitiveness of these firms; their high-cost system and stressed public finances compelled the Center to pursue a privatization strategy in line with the February 2020-21 budget.
A significant move in this direction will be needed to fully reshape the boards of central public sector companies to reorganize their organization, strengthen their organizational autonomy, along with good corporate governance requirements as these businesses employ more than 15 lakh citizens.
