From the Viewsroom

From the Viewsroom: Not above board

Tina Edwin | Updated on January 08, 2018

Do political appointees to PSE boards have relevant credentials?

There is nothing unusual about the appointment of BJP spokesperson and a medical doctor, Sambit Patra, to the board of ONGC, one of ten most valuable listed entities and the most valuable public-sector enterprise. Every political party has taken such liberties to appoint its own people as non-official or non-executive directors of blue chip public sector enterprises. Patra is not the only one to be so appointed this time. The list includes Tamilisai Soundarajan, another BJP spokesperson and a medical doctor, appointed to the board of BPCL last month, and Gauri Chaudhary, a former executive committee member of BJP, to that of Power Finance Corporation. Other BJP members so appointed include Shazia Ilmi (EIL) and Syed Zafar Islam (Air India) and Asifa Khan (HPCL).

As a majority shareholder in these listed enterprises, the government is entitled to appoint its nominees on their boards. Most of these appointments seem to have served two objectives – reward party faithfuls and, where required, comply with statutory requirement of appointing a woman director. The competence of an individual to discharge his or her duties as a non-official cum independent director has, however, been ignored. One wonders if these individuals as independent directors will exercise adequate oversight over the management of the company and ask the right questions on behalf of all shareholders, and particularly those with minority holding.

Ironically, these appointments run contrary to the experience criteria listed in guidelines for board level appointments, reissued by the Centre in February. It lists as eligible retired government officials, retired CMDs/CEOs of other central public enterprises, academicians, former and serving CEOs and directors of private companies and professionals of repute with more than 15 years of experience in relevant domains. Persons of eminence with proven track record from industry, businesses, management or agriculture are eligible. Which of these criteria do political appointees meet?

Tina Edwin Senior Deputy Editor

Published on October 08, 2017

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