Should PSU recruitment be independent of PESB? -Governance Now

Should PSU recruitment be independent of PESB?

Samir Sachdeva | May 3, 2010

The Sam Pitroda panel on restructuring BSNL has recommended enhancing the quality of senior executives to make the PSU more competitive. Following that, BSNL is contemplating hiring top talent from the market and is reportedly ready to pay top dollar as well (Rs 10 crore per annum for the CEO and up to Rs 5 crore for deserving board members, is what is being talked about).

But this will be possible only if BSNL is taken out of the preview of Public Enterprises Selection Board (PESB) and Department of Public Enterprises (DPE) because it these two agencies that hold the power to recruit top management. It is indeed strange that when board of various private companies appoint CEOs and top management the boards of PSU behemoths are hamstrung thus. If the Board of Directors of a PSU are not empowered to hire or fire its CEOs then how can they be held liable for performance or non performance of a PSU?

So the question: Will it be prudent to bow to changing market realities and make PSU recruitment independent of PSEB?

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