The government on November 17 filled up the posts of five independent directors at Coal India’s board, out of the total seven posts, which had been lying vacant for more than a year.
“Coal India will be going for another round of divestment and foreign investors are very particular about adherence to corporate governance. With five posts being filled up Coal India can now take long-term investment decisions as well as policy decisions,”
In all, 42 posts of independent directors need to be filled by the government at Coal India and its eight subsidiaries. In the absence of independent directors at subsidiaries, these companies cannot function at their full potential. The units that have been affected are the nomination committee, corporate social responsibility committee, investment committee, project committee and audit committee. The nomination committee considers people for top posts within the company and its job is critical for manning senior posts.
Coal India’s subsidiaries – Eastern Coalfields, Bharat Coking Coal, Central Coalfields, Western Coalfields, Northern Coalfields and Central Mines Planning & Design Institute – need a total of 30 independent directors, five in each subsidiary. All expect two of these posts are vacant.
Two other subsidiaries, South Eastern Coalfields and Mahanadi Coalfields, have four posts each for independent directors, all of which are vacant.
Clause 39 of the Article of Association of Coal India requires that it will have chairman and managing director, functional directors, independent directors and nominees.
Although the government has to fill up the posts of independent directors within 90 days, these posts have remained vacant for more than a year.