New Delhi: Central Public Sector Enterprises (CPSEs) that fail to comply with corporate governance norms will get negative marking from next fiscal, Department of Public Enterprises Secretary O P Rawat said Thursday.
The DPE has done away with 5 percent weightage to the compliance of corporate governance guidelines as CPSEs are expected to comply with these, he said at a function organised by the Standing Conference of Public Enterprises (SCOPE).
"The public enterprises will get a negative marking (from next fiscal) in case they do not comply with the guidelines in true spirit and deliver the best results," Rawat said.
In the Memorandum of Understanding (MoU) for 2013-14, compliance of corporate governance will not be a parameter under the non-financial parameters.
Under the MoU, which is signed between a CPSE and its administrative ministry, there are two parameters - financial and non-financial.
Presently, corporate governance is a part of non- financial parameter and has a weightage of 5 marks in the MoU.
SCOPE Director General U D Choubey said good corporate governance is a long-term commitment to enhance the value for all stakeholders in a transparent, fair, honest and accountable manner.
Besides, he said Indian CPSEs are Board-run companies having very complex coalition of three different layers of directors -- functional directors, government nominee directors and independent directors.
"There is a need for transition and transformation of all these three layers as they come from different backgrounds. Therefore, there is a need to organise orientation programmes so that CPSEs boards are run on a system oriented process," Choubey said.
First Published: Thursday, February 21, 2013, 21:46