Financial Daily from THE HINDU group of publications
Friday, Jun 17, 2005
Financial Daily from THE HINDU group of publications Friday, Jun 17, 2005 |
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Corporate
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Company Law Committee set up to study Irani panel proposals on independent directors
K.R. Srivats
New Delhi , June 16 THE Finance Ministry has set up a three-member panel to examine the suggestions of the J.J. Irani Committee on Company Law and specifically on the composition of corporate board of directors. Independent director representation on company boards continues to be a contentious issue for both the regulator as well as the corporate community. India Inc has been making a case for a harmonious approach between the listing agreement requirements and the company law provisions on the issue of independent directors. The three-member committee includes a representative each from the Company Affairs Ministry, the Securities and Exchange Board of India and the Finance Ministry, according to official sources. While the Irani committee had recommended that one-third of the board should comprise independent directors, the revised Clause 49 of the listing agreement put out by SEBI had stipulated that at least 50 per cent of the board should consist of independent directors. Corporate India has been directed by SEBI to comply with the revised Clause 49 by December 31. When asked to comment on the possible dissonance between the proposed company law and the revised Clause 49, Mr Prem Chand Gupta, Minister of State (Independent Charge) for Company Affairs, said the issue on independent directors could be resolved through healthy discussions with SEBI and all stakeholders. "There is no difference of opinion or dispute between the Ministry of Company Affairs and SEBI on the issue of independent directors. The number of directors on a board is not important. What is important is the quality of such directors on the board."
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