PMO nod to PSUs getting serving private firm CEOs as directors

The Prime Minister's Office has cleared a proposal to appoint serving chief executive officers (CEOs) of private companies as independent directors of public sector undertakings.

The proposal was cleared last week and the Department of Public Enterprises (DPE) is set to issue guidelines in the next few days, sources confirmed.

As per the conditions laid down by the PMO, serving CEOs would be considered for PSUs only when suitable candidates are not available from among former CEOs of private companies. Moreover, the PMO has specified that there should not be any conflict of interest between their current firms and the PSUs where they are to be appointed as independent directors. Should and when such a conflict of interest be noticed, the CEOs would be removed from the directorship.

While the provision of appointing CEOs of private companies was earlier in force, it had been stopped since September 2010.

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