C&AG finds top CPSEs not following corporate governance norms
The Comptroller and Auditor General (C&AG) in its recent Audit Report has highlighted that some Central Public Sector Enterprises are not following provisions related to corporate governance, with half of the listed ones not having women directors on the board.
As of March 31, 2021, 717 CPSEs were under the audit jurisdiction of C&AG. These included 508 government companies, 203 government-controlled other companies, and six statutory corporations.
In the review of 72 listed CPSEs, it was observed that the provisions of the Companies Act, 2013, DPE Guidelines and Regulations of Securities and Exchange Board of India regarding Corporate Governance were not being complied with by some of the CPSEs. Some of the non-compliances are as follows-
- Non-executive directors were less than 50 percent of the Board strength in 32 CPSEs (44 percent); required number of Independent Directors had not been appointed in 59 CPSEs (82 percent).
- The criteria of minimum six directors was not met in 15 out of the 70 (21 percent) listed CPSEs (part of top 2000 listed entities).
- Out of 70 CPSEs (part of top 2000 listed entities), 17 CPSEs (24 percent) have insufficient quorum of directors at the Board meeting, including at least one independent director.
- Out of 72 CPSEs, there was no Audit Committee in three CPSEs (four percent).
- Out of 72 CPSEs, 10 CPSEs (14 percent) failed to follow obligations/ code of conduct with respect to employees including senior management, key managerial persons and directors.
