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Thursday, Nov 28, 2002

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Plea for more managerial autonomy for PSUs

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NEW DELHI, Nov. 27

THE Government should grant more "managerial autonomy" to public sector enterprises (PSEs) to manage their affairs in an efficient manner in the fiercely competitive business environment, according to the Chairman and Managing Director of Bharat Heavy Electricals Ltd (BHEL), Mr K.G. Ramachandran.

"The Navratna initiatives and the memorandum of understanding (MoU) concept have definitely given the PSEs a bit of functional and financial autonomy. But this has not been accompanied by managerial autonomy. A good proportion of managerial autonomy would bring into play the necessary speed of response that is so essential for growth in the current times," he said at a meeting on corporate governance organised by the Associated Chambers of Commerce and Industry of India (Assocham).

He also emphasised on the need for shifting the focus on corporate governance from mere maximisation of shareholder value to taking care of all stakeholders.

"We should not end up making a big fetish on independence of non-executive directors. If we are going to do this, we may end up with ignorant directors," he said, adding that specialised directors are the need of the hour.

Some of the industry representatives said that there should be no distinction in the responsibilities of non-executive directors and institutional directors. It was pointed out that institutional directors enjoy immunisation from certain defaults while non-executive directors are still subjected to the same threat of defaults.

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