PSU independent directors won't have say in board performance review

NEW DELHI: Independent directors on PSU boards will no longer have a say in reviewing the performance of functional and government directors and the board as a whole.

The move comes in backdrop of concerns raised by various CPSEs and their administrative ministries.

The Department of Public Enterprises, under the Ministry of Heavy Industries and Public Enterprises, has amended the provisions regarding the role and functions of non-official directors appointed to the boards of CPSEs, according to an office memorandum.

"The Department of Public Enterprises (DPE) has received a number of references regarding the role and functions of independent directors in this regard. It was found that there was no rationale behind a NoD reviewing the performance of a functional director as there were at similar positions," a DPE official said.

It was also felt that there were already enough checks and balances in place such as Central Vigilance Commission to look into such issues, so there was no need for another review by the independent directors, he added.

Besides, NoDs would not have powers to review the performance of chairperson of the PSU, taking into account the views of all the directors, the memorandum said.

The department has asked the administrative ministries/departments to bring the same amendments to the notice of CPSEs concerned under their respective control and also independent directors appointed on the boards of such CPSEs for their information and compliance.