With the onset of economic reforms and liberalisation, the Government initiated a systemic shift to a more open economy with greater reliance upon market forces and a larger role of the private sector including foreign investment. However, the revival and sustenance of the public sector continues to be a well-recognised strategy of promoting ‘inclusive growth’ despite the liberalisation spree.
With the dismantling of licence permit raj the public enterprises are exposed to competition from domestic private sector companies as well as large multi-national corporations. In view of the noteworthy involvement of the public sector in our economy, improving corporate governance in CPSEs has assumed a sense of exigency. Given the competitive environment, the Central Public Sector Enterprises (CPSEs) are undertaking numerous measures to recast themselves by adopting significant initiatives for governance restructuring, administrative reform, up-scaling technologies and capacities in order to operate at par with the private counterparts in the liberalised economy. Keeping this in perspective, the Ministry of Public Enterprise came out with guidelines in 2007 for CPSES and these have become mandatory in March 2010. The main objective behind this was to ensure that the Central Public Sector Enterprises imbibe corporate governance principles in their functioning and remain transparent and accountable to all stakeholders.
Bearing in mind the values at stake, it is only reasonable that governments develop their expertise as owners and improve the governance of their enterprises. The paper looks into guidelines on good corporate governance as they underscore that Public enterprises need to evolve their own code of corporate ethics and conduct and ensure adherence to such codes. These steps intend to make public enterprises globally competitive. However, while the gains are apparent, practicing corporate governance of CPSEs is an intricate task. With continued focus towards achieving excellence, several of the CPSEs have become self reliant and are playing a critical role in building the Indian economy. The paper takes a view that the recent initiatives undertaken to revamp the corporate governance in CPSEs shall help install good governance parameters. The attempt is to putforth these measures and their impact on the CPSEs.
Corporate governance, Central public sector enterprise accountability, Empowering, Board of directors, Audit mechanisms, Company bill, Corporate social responsibility
