Govt Issues State-Owned Enterprises Guidelines to Enhance Governance, Transparency

The notification stated, “Pursuant to sub-section 3 (ii) of Section 4 of the State-Owned Enterprises (Governance and Operations) Act, 2023, and in alignment with Paragraph 26 of the State-Owned Enterprises (Ownership and Management) Policy, 2023, we are issuing the enclosed “State-Owned Enterprises (C-Level Appointments) Guidelines 2024” for your immediate attention and implementation. These Guidelines, which apply to the appointments of Chief Executive Officer (CEO), Chief Financial Officer (CFO), Chief Internal Auditor (CIA), and Company Secretary (CS), are designed to enhance the governance, transparency, and operational efficiency of State-Owned Enterprises (SOEs). Your adherence to these guidelines is crucial for achieving the strategic objectives set forth under the Act and the Policy”.

These guidelines shall be called the State-Owned Enterprises (C-Level Appointments) Guidelines 2024” and shall apply to appointments of Chief Executive Officer (CEO), Chief Financial Officer (CFO), Chief Internal Auditor (CIA) and the Company Secretary (CS) by whatever name called. ii. These guidelines shall apply to all the public sector companies as defined in the Act as well as on the statutory SOEs. However, if required, the Boards of statutory SOEs may make necessary adjustments in accordance with their statutory requirements. All SOEs shall concurrently comply withthe applicable laws/rules/regulations as per sectoral regulatory requirements, particularly related to the fitness and propriety, provided those laws and regulations are not inconsistent with the Act. iii. These Guidelines shall come into force immediately and shall apply on any appointments made after this date.

The appointment of CEO shall be made in accordance with Section 18 and 22(2) of the Act. ii. The minimum educational qualification and experience for appointments as CEO, CFO, CIA and CS are given in Schedule-I of these Guidelines. The Board of the SOE may adopt higher educational qualifications and/or experience threshold keeping in view the requirements of the position. iii. The appointment process should be initiated well in advance, preferably three months before the term of the incumbent is due to expire.

The Board shall develop a Job Description for each of the C-Level positions in the light of the job requirements; fit and proper criteria specified in Section 16 and Schedule-IV of the SOEs Act, 2023; delegations and accountabilities of the role; and any other dimensions that the Board may deem appropriate.

The vacancy shall be advertised through publication in the print media as well as on the website of the SOE. The advertisement shall clearly specify, inter-alia, the minimum qualifications, experience, age limit (if any), requirements of fit and proper criteria and the roles and responsibilities of the position. ii. The applicants shall be required to provide copies of the degrees/ diplomas/ testimonials, and other documentation supporting the application. iii. The deadline for applications will not be less than 14 calendar days. iv. Notwithstanding the foregoing, the Board may outsource the process of inviting applications to a head-hunting firm requiring it to recommend a short list of candidates.

The appointment process of the C-Level positions, except the CIA, shall be supervised by the Human Resource Committee of the Board, or a Special Committee constituted for the purpose by the Board (the Committee). ii. In the case of the post of CIA, the process will be supervised by the Audit Committee of the Board.