SCOPE Stands for Alternative Mechanism on CMD Issue

NEW DELHI: The Standing Conference of Public Enterprises (SCOPE), has urged the government to seriously consider the Kotak committee report, which among other things, has called for separating and dividing the role of CMD. The proposed separation of the roles of non-executive chairperson and managing director 'will create confusion and conflicting situations for public-sector enterprises, which may lead to delay in decision-making', it said.

 

In March, the Securities and Exchange Board of India (Sebi) had accepted the bulk of the recommendations of the Kodak Committee on Corporate Governance, including the one pertaining to separation of the chairman and the CEO or managing directors posts for the top 500 listed companies by market capitalization from April 2020.

 

'Alternatively, in order to make governance simpler, transparent and accountable, a sovereign holding structure could be considered for PSEs wherein a flatter structure would prevail so as to consolidate multiple synergic PSEs into a single sector implying simpler and measurable governance along with advantage of economies of scale, greater negotiating powers, higher value of assets etc,' said UD Choubey, DG, SCOPE Choubey was a member of the Kodak Committee. SCOPE has urged the government to give due consideration to the clause on separation of CMD posts when SEBI submits the report to Government, he said.