The Union Government is soon going to embark on a hiring spree for independent director positions in Central Public Sector Enterprises (CPSEs), as the number of vacancies is getting alarming. As of December 2024, 86% of independent director positions in central public sector enterprises (CPSEs) were vacant. Filling these vacancies urgently is crucial, as independent directors act as custodians of the most exacting standards of corporate governance and protectors of stakeholders’ interests.
The vacancy rose by 27% in the last two months, prompting the government to accelerate the hiring process. A reliable source points out that urgent efforts are being made to fill the 200 such vacancies on the boards of 64 listed CPSEs.
According to the latest official data, as many as 648 of about 750 independent or non-official director positions on the CPSE boards were
vacant at the end of December. The vacancies swelled to 441 at the end of October, as the tenures of many of them expired in recent months.
The government is exploring options to fast-track the appointment process. It also includes extending the tenure of non-official directors to fill in the vacancies.
As per report, CPSEs and their administrative ministries are engaged in talks with the departments of personnel and training (DoPT) and public enterprises and the corporate affairs ministry to fill in the positions urgently.
Such directors are usually appointed for a period of three years, with a provision for an extension of three years in the same CPSE. Beyond that, the directors can’t serve on the board of the same CPSE.
As per norms, at least one-third of a listed company’s directors must be the independent ones. An unlisted public company, beyond a stipulated size, needs to have at least two.
There are 389 CPSEs, including subsidiaries, in India, of which 70 are listed, which account for more than 8% of the total market capitalisation of BSE firms.
