Non-Official Directors
Department
of Public Enterprises (DPE)
formulates policy guidelines on the Board structure of CPSEs. In pursuance of
the public sector policy being followed since 1991 several measures have been
taken by the Department of Public Enterprises to professionalize the Boards of
public enterprises. The extant guidelines provide that outside professionals
should be inducted on the Boards of CPSEs in the form of part-time non-official
Directors and that the number of such Directors should be at least 1/3rd of the
actual strength of the Board. In the case of listed CPSEs headed by executive
Chairman, the number of non-official Directors (Independent Directors) should
be at least half the strength of the Board.
The proposals for
appointment of non-official Directors are initiated by the concerned
Administrative Ministries/Departments. The selection of non-official Directors
in respect of all CPSEs is made by the Search Committee which presently
consists of Secretary (DoPT) as chairperson, Secretary (DPE), Secretary of the
administrative Ministry/Department of the CPSE and 2 non-official Members. The
concerned Administrative Ministry/Department appoints the non-official
Directors on the basis of recommendations of Search Committee after obtaining the
approval of competent authority.
As regards selection and
appointment of non-official Directors on the Boards of CPSE, the following
eligibility criteria has been prescribed:-
Criteria of Experience
(i)
Retired
Government officials with a minimum of 10 years experience
at Joint Secretary level or above.
(ii)
Persons
who have retired as CMD/CEOs of CPSEs and Functional Directors of the Schedule
‘A’ CPSEs. The ex-Chief Executives and ex-Functional Directors of the CPSEs
will not be considered for appointment as non-official Director on the Board of
the CPSE from which they retire. Serving Chief Executives/Directors of CPSEs
will not be eligible to be considered for appointment as non-official Directors
on the Boards of any CPSEs.
(iii)
Academicians/Directors
of Institutes/Heads of Department and Professors having more than 10 years
teaching or research experience in the relevant domain e.g. management,
finance, marketing, technology, human resources, or law.
(iv)
Professionals
of repute having more than 15 years of relevant domain experience in fields
relevant to the company’s area of operation.
(v)
Former
CEOs of private companies if the company is (a) listed on the Stock Exchanges
or (b) unlisted but profit making and having an annual turnover of at least
Rs.250 crore.
(vi)
Persons
of eminence with proven track record from Industry, Business or Agriculture or
Management.
(vii)
Serving CEOs and Directors of private companies listed on the
Stock Exchanges may also be considered for appointment as part-time
non-official Directors on the Boards of CPSEs in exceptional circumstances.
Criteria of Educational
Qualification
Minimum
graduate degree from a recognized university.
Criteria of Age
The age band
should be between 45-65 years (minimum/maximum limit)
This could,
however, be relaxed for eminent professionals, for reasons to be recorded,
being limited to 70 years.