The Hindu Business Line : Govt to consider all stakeholders' interest on board composition norms

THE Company Affairs Minister, Mr Prem Chand Gupta, made it clear on Saturday that the Irani committee's submission that one-third of the board of a listed company should comprise independent directors was only a view of the committee and not that of the Government.

"We will take a decision on this matter keeping in mind the interest of all the stakeholders. The Government has not yet taken any final view on board composition under the proposed new company law. The recommendation on one-third board representation for independent directors has come from Irani committee," Mr Gupta told reporters on the sidelines of a seminar on new company law organised by the Institute of Company Secretaries of India (ICSI).

Mr Gupta's remarks assumes significance, as the concept paper on the new company law had suggested that close to 50 per cent of the board of a listed company should comprise independent directors.

The Securities and Exchange Board of India had, through the revised Clause 49 of the listing agreement, mandated that at least 50 per cent of the board of a listed company should comprise independent directors. Corporates have been given time until December 31, 2005 to comply with the revised clause.

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Govt to consider all stakeholders' interest on board composition norms