Financial Daily from THE HINDU group of publications
Saturday, Jul 09, 2005
Financial Daily from THE HINDU group of publications Saturday, Jul 09, 2005 |
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Corporate
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Company Law Independent directors: Survey finds most CEOs, MDs favour 25 pc limit Our Bureau
New Delhi , July 8 EIGHTY FIVE per cent of country's chief executive officers and managing directors have said that the strength of independent directors (IDs) in listed companies should not be more than one-fourth of the board's strength, according to the Associated Chamber of Commerce and Industry Business Barometer Survey, which sought the opinion of about 200 CEOs and MDs in the country on the issue. The survey has been conducted in view of indications that the Ministry of Company Affairs (MCA) will take a decision as regards to the number of IDs on the board of public and private limited companies by August 2005. The remaining 15 per cent of the top CEOs say that the decision for deciding the number of IDs on the board of listed companies should be left entirely in the hands of the MCA. On the practice of celebrities being inducted in the boards of large corporates, particularly in the private sector, 70 per cent CEOs are of opinion that the practice be discontinued since such names mislead the shareholders. The CEOs unanimously concluded that since independent directors are representative of the shareholders, they should also be made responsible for the acts of omission and commission of the management. This is necessary to ensure that independent directors are taking active interest in the matters of management and are not merely for fulfilling the provisions of Clause 49.
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