Board Meeting Attendance Up in Maharatna & Navratna Cos

New Delhi, Mar 13 (PTI) Central public sector enterprises in the country, specifically Maharatna and Navratna companies, have seen significant improvement in board meeting attendance by directors over the past four years, according to a survey by Excellence Enablers.

The survey, which covered 13 Maharatna and 20 Navratna companies, found that in FY24, no director had zero attendance at board meetings. In contrast, in FY23, 14 directors had zero attendance. In FY22, there were 9 such directors, and 3 directors were absent from all board meetings in FY21.

The Excellence Enablers' fourth edition of the survey emphasised that it is a reasonable expectation for all directors, both executive and non-executive, to attend every board meeting. Absences should only occur for extraordinary reasons that could not have been anticipated.

While the legal requirement mandates that each director attend at least one board meeting per year, the survey finds this standard is clearly unsatisfactory. It suggests that directors who miss meetings for legitimate reasons should still be able to submit their comments on agenda items in advance so that they can be taken note of
during discussions.

Further, the survey by a Corporate Governance advisory firm said, "the question of discontinuing the appointment of Directors who have had zero attendance in the previous FY should be seriously considered".

The survey, which analyses corporate governance data of Maharatna and Navratna companies from publicly available sources, also looked into other aspects of board governance, including board size, the presence of independent directors (IDs), and gender representation on boards.

With regards to board size, the survey noted that the minimum board size was 6, and the maximum remained 16 in FY24. In comparison, in FY23, the minimum board size was 7 (for 2 companies), and the maximum was 17. In FY22, the minimum was 6 and the maximum was 16 (for 2 companies) and in FY21, the minimum size was 4, and the maximum size was 12.

The average board size was 7.78 in FY21, 10.84 in FY22, 10.63 in FY23, and 10.72 in FY24.

The survey noted that the size of the board significantly influences its performance. With a minimum of four members and at least one board-appointed committee, the board should have sufficient members to ensure proper committee functioning and avoid overloading any individual member.

Having directors participate in multiple committees also helps reduce information asymmetry among independent directors.

With respect to independent directors on boards, the survey found that in FY24, 24 companies were found to have fewer independent directors than the prescribed minimum, making them non-compliant.

In all four FYs, 10 companies consistently failed to meet the minimum number of independent directors remaining non-compliant.

With regards to women's representation, the survey said the presence of women on boards has shown improvement. As of March 31, 2021, 16 companies had no female directors. By March 31, 2022, only two companies lacked female directors. As of March 31, 2023, one company had no female directors, and as of March 31, 2024, this figure remained the same.

The number of women holding Key Managerial Personnel (KMP) positions showed a positive trend. As of March 31, 2022, 13 companies had women in KMP roles. This number increased to 14 by March 31, 2023, but fell back to 13 by March 31, 2024. Interestingly, 10 companies consistently had women in KMP positions across all three years.

While the presence of a woman ID on Boards has been mandated, there is no similar provision to facilitate women executives graduating to board positions.

This can happen only if a sufficient number of women are provided with appropriate career progression in the organisation. It is equally important to focus on more women occupying positions of Chair/ MD, as well as being on a number of board committees, and chairing some of them, the survey said.