'Board of directors composition of major companies below accepted norm'

Although the framework of Indian corporate governance has been ranked as one of the best in the world, the composition of board of directors for major companies listed on the National Stock Exchange (NSE) is below accepted norms, an official said on Saturday.

"25 PSUs (Public Sector Units) do not have appropriate composition of the board of directors. Qualified independent audit committee is not there in nine PSUs and it is the same in six of the top 500 private companies on the bourse", chief of regulations at NSE, V.R. Narasimhan said at an event organised by the Indian Chamber of Commerce here.

He said an independent audit of a company's accounts is crucial and all companies should have adopted it.

"Further, of the top 500 companies listed on bourse, 15 companies do not have an appropriate board (of directors), which is the fundamental corporate governance requirement," he said.

He said even after capital market regulator SEBI asked companies to appoint women on the board of directors, 25 state-owned companies and 74 of the top 500 companies listed on NSE are yet to comply.

"Guidelines on corporate governance in India is one of the best in the world," he added.

As per Narasimhan, although the regulatory framework and guidelines on corporate governance in India are well defined, implementation of the same needs to be looked into.

NSE collected Rs.14.3 crore during 2014-15 as non-compliance fines from 225 active companies.