With the government kickstarting the disinvestment of equity in central public sector enterprises, the Standing Conference of Public Enterprises (SCOPE) said listing of PSEs in bourses would help improve corporate governance. Chairman of Scope Arup Roy Choudhury spoke to HT. Excerpts:
How do you assess the public sector in India?
Central public sector is one of the prime contributors to the economic success story of India. It has made significant contribution towards fulfilling the twin objective of economic development with social justice. Since launch of economic reform programme in 1991-92, CPSEs have registered 3.21 times increase in equity while their net worth has increased 9.7 times, turnover 10.6 times and net profit over 37 times. Today, giant PSEs are model of management excellence and have place of pride in the hierarchy of corporate India.
What about corporate governance perspective in CPSEs?
CPSEs are models in transparency and accountability. In addition to fulfilling of the SEBI guidelines on corporate governance, CPSEs have always been answerable to the public at large and are under regular scrutiny... Thus there is no Enron or a Satyam story amongst CPSEs. The department of public enterprises has also issued guidelines on corporate governance for both listed and unlisted PSEs ...
Government has given boost to disinvestment of its equity in PSEs. What are your views?
SCOPE supports the disinvestment programme of the government. It has been advocating listing of more and more PSEs on bourses as it helps to benchmark the performance of PSEs and improve their corporate governance.
What about requirement of independent directors on the Boards of listed companies?
SCOPE is advocating that the number of Independent Directors may be reduced to one-third from 50 percent as per SEBI's Clause 49 of the Listing Agreement. Many PSEs have informed that a large Board make it unwieldy and contribute to delay in decision making. It is also becoming difficult for the CPSEs to have quality experienced persons on its board as Independent Directors.