Standing Conference of Public Enterprises (Scope) has been closely involved with the government's policy-making for the central public sector enterprises (CPSEs) as a representative body, dealing in issues like corporate governance, corporate social responsibility (CSR) and functional autonomy. It has also played a key role in creating awareness among senior officials of PSEs about the best international practices in management through seminars, symposiums and conferences.
UD Choubey, director-general, Scope, speaks on key issues of interest to PSEs. Excerpts:
How is corporate governance in CPSEs? What is Scope's involvement in this matter?
CPSEs have adopted high standards of corporate governance in their functioning. Apart from accountability to Parliament, they are governed by many systems and mechanisms like the MoU system, review by administrative ministry, CAG audit and CVC scrutiny. These mechanisms have served the objective of ensuring accountability and governance in these enterprises.
We have held seminars and symposiums to sensitise seniors officials of these companies like chief executives, directors and potential directors about corporate governance practices and related aspects.
Scope has also circulated a draft board approved policy on corporate governance to all CPSEs so that they could become a role model for the corporate sector in India.
How have CPSEs performed post-liberalisation?
The Indian public sector has emerged as an exemplary model in the recent recession. It remained vibrant. There was no production cut. Rather, the CPSEs produced more. Unlike the private sector, not a single employee was given the pink slip. Thus, it helped the Indian economy maintain its growth profile.
After liberalisation, PSEs have performed exceedingly well. The equity capital or the primary investment in CPSEs increased from Rs. 43,245 crore in 1990-91 to Rs. 1,38,843 crore in 2008-09. Turnover increased from Rs. 1,18,676 crore to Rs. 12,63,405 crore during the same period. Their aggregated net profit grew from Rs. 2,272 crore to Rs. 84,228 crore.
Issues are often raised about interference by administrative ministries in the day-to-day affairs of public enterprises? What is Scope’s stand on this issue?
For autonomy to be meaningful, respective domain of government and CPSEs should be clearly defined. There should be complete separation of ownership and board-level management to strike a balance between autonomy and state control. The tendency to get involved in the actual management of CPSEs needs to be resisted by the government. A policy of selective government intervention in the management of public enterprises will deliver better results.
What are other key issues affecting the management and performance of PSEs?
Empowerment of PSEs is one of the major issues for the effective functioning of PSEs. The issue of an overload of independent directors on the boards of PSEs needs to be resolved as it makes the board unwieldy and too large to manage. Moreover, the independence of independent directors also needs to be reviewed. The selection of directors should be made merit-based and transparent. Multiplicity of the control structure in PSEs has to be looked into as it sometimes impedes speedy decision making, which is essential in today's globally competitive environment.
How is Scope helping PSEs raise leadership standards?
For developing effective leaders, we have held a Global Leadership Programmes for top-level executives of CPSEs. Similarly, we have also held workshops to create awareness about the selection process.
Women constitute an important part of the workforce. What does Scope do to promote gender equality in CPSEs?
India’s growing economy is witnessing increased participation of women in PSEs. Scope, keeping in view of the changing needs and to review the existing gender policy and practices to match with global standards, has held programmes on gender policy for workplaces. Recently, Scope did a programme in collaboration with the International Labour Organisation. Some recommendations were made by experts in the conference, which we have submitted to the government. We have also suggested that PSEs maintain data on the strength of women employees in their workforce and publish the same in their annual reports. We have asked CPSEs to furnish the same to Scope for compilation.
UD Choubey, director-general, Scope, speaks on key issues of interest to PSEs. Excerpts:
How is corporate governance in CPSEs? What is Scope's involvement in this matter?
CPSEs have adopted high standards of corporate governance in their functioning. Apart from accountability to Parliament, they are governed by many systems and mechanisms like the MoU system, review by administrative ministry, CAG audit and CVC scrutiny. These mechanisms have served the objective of ensuring accountability and governance in these enterprises.
We have held seminars and symposiums to sensitise seniors officials of these companies like chief executives, directors and potential directors about corporate governance practices and related aspects.
Scope has also circulated a draft board approved policy on corporate governance to all CPSEs so that they could become a role model for the corporate sector in India.
How have CPSEs performed post-liberalisation?
The Indian public sector has emerged as an exemplary model in the recent recession. It remained vibrant. There was no production cut. Rather, the CPSEs produced more. Unlike the private sector, not a single employee was given the pink slip. Thus, it helped the Indian economy maintain its growth profile.
After liberalisation, PSEs have performed exceedingly well. The equity capital or the primary investment in CPSEs increased from Rs. 43,245 crore in 1990-91 to Rs. 1,38,843 crore in 2008-09. Turnover increased from Rs. 1,18,676 crore to Rs. 12,63,405 crore during the same period. Their aggregated net profit grew from Rs. 2,272 crore to Rs. 84,228 crore.
Issues are often raised about interference by administrative ministries in the day-to-day affairs of public enterprises? What is Scope’s stand on this issue?
For autonomy to be meaningful, respective domain of government and CPSEs should be clearly defined. There should be complete separation of ownership and board-level management to strike a balance between autonomy and state control. The tendency to get involved in the actual management of CPSEs needs to be resisted by the government. A policy of selective government intervention in the management of public enterprises will deliver better results.
What are other key issues affecting the management and performance of PSEs?
Empowerment of PSEs is one of the major issues for the effective functioning of PSEs. The issue of an overload of independent directors on the boards of PSEs needs to be resolved as it makes the board unwieldy and too large to manage. Moreover, the independence of independent directors also needs to be reviewed. The selection of directors should be made merit-based and transparent. Multiplicity of the control structure in PSEs has to be looked into as it sometimes impedes speedy decision making, which is essential in today's globally competitive environment.
How is Scope helping PSEs raise leadership standards?
For developing effective leaders, we have held a Global Leadership Programmes for top-level executives of CPSEs. Similarly, we have also held workshops to create awareness about the selection process.
Women constitute an important part of the workforce. What does Scope do to promote gender equality in CPSEs?
India’s growing economy is witnessing increased participation of women in PSEs. Scope, keeping in view of the changing needs and to review the existing gender policy and practices to match with global standards, has held programmes on gender policy for workplaces. Recently, Scope did a programme in collaboration with the International Labour Organisation. Some recommendations were made by experts in the conference, which we have submitted to the government. We have also suggested that PSEs maintain data on the strength of women employees in their workforce and publish the same in their annual reports. We have asked CPSEs to furnish the same to Scope for compilation.
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