Decision on Independent Dirs by Aug
The government on Monday said a final decision on the number of independent directors on a company's board can be expected by August by when it will prepare a basic framework for a new Companies Act.
By PTI |
NEW DELHI: The government on Monday said a final decision on the number of independent directors on a company's board can be expected by August by when it will prepare a basic framework for a new Companies Act.
"Industry should decide what they feel and want. We will discuss with SEBI and other stakeholders... May be, it will be resolved by August by when we prepare the framework for the new Act," Company Affairs Minister P C Gupta said here on the sidelines of a Cii conference on the J J Irani Committee recommendations.
The Minister's view assumes significance in the backdrop of differing views, on the number, taken by SEBI and the Irani Committee, constituted by the Company Affairs Ministry.
While the market regulator insists on half the board being independent in line with Clause 49, the Irani Committee -- which held extensive discussions with industry and professional bodies -- has gone in for a third.
Gupta, however, claimed that there was "no confrontation" between Sebi and the Ministry over the matter.
It is important to note that while the Minister seeks the advice of India Inc. on the matter, industry chamber Ficci has advocated that independent directors should comprise not more than one-fourth of a company's board while another representative body, Assocham, has thrown its hat with the Irani Committee, seeking one-third.
Both seek less numbers than Sebi's 50 per cent. Assocham has also asked the government to extend the deadline for compliance with the Clause 49 regulation by six months to June 2005.
"Industry should decide what they feel and want. We will discuss with SEBI and other stakeholders... May be, it will be resolved by August by when we prepare the framework for the new Act," Company Affairs Minister P C Gupta said here on the sidelines of a Cii conference on the J J Irani Committee recommendations.
The Minister's view assumes significance in the backdrop of differing views, on the number, taken by SEBI and the Irani Committee, constituted by the Company Affairs Ministry.
While the market regulator insists on half the board being independent in line with Clause 49, the Irani Committee -- which held extensive discussions with industry and professional bodies -- has gone in for a third.
Gupta, however, claimed that there was "no confrontation" between Sebi and the Ministry over the matter.
It is important to note that while the Minister seeks the advice of India Inc. on the matter, industry chamber Ficci has advocated that independent directors should comprise not more than one-fourth of a company's board while another representative body, Assocham, has thrown its hat with the Irani Committee, seeking one-third.
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Both seek less numbers than Sebi's 50 per cent. Assocham has also asked the government to extend the deadline for compliance with the Clause 49 regulation by six months to June 2005.
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