It has been reported that that the CEOs of PSUs will sit in judgment on the efficacy of government directors.

This proposal, from the Board for Reconstruction of Public Sector Enterprises (BRPSE), does not appear well-thought-out and, hence, would need further consideration.

PSUs are owned by the government and it is on its behalf that directors are appointed to the companies concerned. So it is the government that should have a say on the efficacy of the CEO and not the other way around.

Corporate history in the developed West abounds in instances of powerful CEOs overshadowing the board and not giving full information to the directors for forming an opinion different from that of the CEO's. If the BRPSE proposal goes through it will make PSU CEOs virtual czars.

Incidentally, the BRPSE had earlier suggested handing over sick PSUs to their former personnel who were invited to make a `bid'. That proposal was strange in that it meant giving the sick companies back to some of those who made them sick. And the current one seems to follow the same logic.

S. Subramanyan

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