New Delhi: The report of the Comptroller and Auditor General of India (CAG) has revealed significant shortcomings in the corporate functioning of Central Public Sector Enterprises (CPSEs). According to reports, administrative ministries and the Department of Public Enterprises did not deduct points from the MoU scores of several CPSEs (Central Public Sector Undertakings) despite non-compliance with Securities and Exchange Board of India (SEBI) regulations related to corporate matters.
The CAG, during its review of corporate governance, included 65 CPSEs whose shares or bonds were listed on stock exchanges. Apart from this, bonds or debentures of 36 CPSEs, including four statutory corporations, were listed on the stock exchanges till March 31, 2024.
Shortage of independent directors in 49 CPSEs
According to the CAG report, 49 CPSEs did not have the required number of independent directors on their boards during 2023-24.
The report also revealed that in seven CPSEs the number of non-executive directors remained less than 50 per cent of the total board strength during the entire financial year or part thereof.
Questions have been raised on compliance with related corporate governance standards.
Not a single woman director in seven CPSEs
The CAG review also revealed shortcomings in women's representation on the board. According to the report, there were no women directors on the boards of seven CPSEs.
At the same time, 16 CPSEs included in the top 1000 listed companies did not have any woman independent director during the whole or part of 2023-24.
Review of 65 listed CPSEs
A total of 65 CPSEs whose shares or bonds were listed on stock exchanges were included in the CAG corporate governance review.
Apart from this, bonds or debentures of 36 CPSEs were also listed on the stock exchanges till March 31, 2024. These institutions include four statutory corporations.
The report examined the status of compliance with corporate governance norms in listed CPSEs.
What is MoU score?
MoU Score is a performance evaluation standard used by the Department of Public Enterprises (DPE) to assess the performance of Central Public Sector Undertakings.
The CAG report has raised questions over the fact that despite deficiencies in compliance with SEBI corporate governance rules, points were not deducted in the MoU score of the concerned CPSE.
These figures revealed in the report focus on compliance related to board structure, independent directors and women representation in public sector companies.
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