New Delhi: The government has advised the Central Public Sector Enterprises to follow comprehensive guidelines on corporate governance to protect the interests of shareholders and stakeholders.
The guidelines, issued in June 2007 by Finance Minister P Chidambaram, advise these firms about composition of the board of directors, role and powers of the audit committees, functioning of subsidiary companies, disclosures, accounting standards, risk management and compliance.
“These guidelines, though voluntary in nature, should be followed by all CPSEs as proper implementation of these would protect the interests of shareholders and relevant stakeholders,” the Department of Public Enterprises said in its year-end review.
It said the Central Public Sector Enterprises (CPSEs) would be graded by the department on the basis of their compliance of these guidelines, which should be reflected in the Director’s report and annual reports of the enterprises.
The government had considered and approved implementation of the guidelines, formulated through a consultation process with various stakeholders, keeping in view the relevant laws, rules and instructions.
A number of PSUs are listed on the stock exchanges and conform to Sebi regulations on corporate governance.
The government has given Navratna status to additional three PSUs, taking the total number of Navratnas to 12. These PSUs would now be able to enjoy greater autonomy to incur capital expenditure and enter into joint ventures.