Taking a dim view of the absence of selection procedure for independent directors, Sebi chief Ajay Tyagi today said many are part of “closed clubs” who are appointed at whims and fancies of companies’ promoters.
While stressing that corpoate governance practices need to be improved, Tyagi said some people are quite serious when they take up the role of an independent director, but there are plenty who are just eager to join the board as per convenience.
Speaking at an interactive session with officials from public sector companies, Tyagi said corporate governance is an important issue even as he acknowledged that in India, it is very typical that promoters are quite dominant in companies.
“There is no procedure for selection of independent directors. Many of them, they are in closed clubs, the same people getting nominated or appointed to the same boards,” he said.