The government on Monday said that the number of independent directors on boards of listed companies could be fixed at 33 per cent of the total strength of the board, against 50 per cent as mandated by the Securities and Exchange Board of India (SEBI).
“I think the figure of one-third is sufficient,” Corporate Affairs Minister Prem Chand Gupta said on the sidelines of a seminar organised by industry chamber Assocham.
Gupta said the new company law had been prepared after extensive consultations with the corporate world. “Had apex Chambers of Commerce recommended 25 per cent independent directors on the board of listed companies, the Ministry of Corporate Affairs would have accommodated their demand”, he said.
Special provisions were being incorporated in the amended Company Law Bill to restrict the number of independent directors in listed companies to 33 per cent of their total board’s strength.
The ministry has deferred introduction of the amended new Company Law Bill to the Winter Session of Parliament, as it would not be possible to place in the House in the forthcoming Monsoon session due to various inter-governmental formalities that would take up time for completion.
Gupta said that in order to ensure that corporate governance in India follow the highest standards of transparency and accounting norms, the government would never intervene on the pay package and perquisites of chief executive officers (CEOs).
"There is no intention on the part of the government to regulate remuneration of directors and top executives of companies," he said.
"There is no need to regulate the remuneration of directors and CEOs of companies and there is no intention to do so," Gupta said.