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Governance in PSUs

Public Sector Undertakings (PSUs) are owned by the Government (President of India).

  • Examples: SBI, ONGC, NTPC, BHEL.

The Unique Challenge

PSUs face a "Dual Objective".

  1. Commercial: Make profit (like any company).
  2. Social: Serve the nation (create jobs, build infrastructure, subsidized fuel).

Governance Issues in PSUs

  1. Board Autonomy: The "Real" boss is the Ministry (Politicians/Bureaucrats). The Board often lacks power to make strategic decisions (e.g., Oil prices fixed by Govt, not ONGC Board).
  2. Independent Directors: Often, the positions are vacant or filled by retired bureaucrats rather than industry experts.
  3. Audit Overload: They are audited by:
    • Statutory Auditors.
    • CAG (Comptroller and Auditor General).
    • CVC (Central Vigilance Commission).
    • Parliamentary Committees.
    • Too much scrutiny can lead to paralysis.

DPE Guidelines

The Department of Public Enterprises (DPE) issues governance guidelines for Central PSUs (Maharatna, Navratna scheme) to grant them more autonomy.

Note

The Dilemma: If SBI writes off a loan, is it a commercial decision (Business) or a scam (Corruption)? Fear of CVC (Vigilance) often makes PSU bankers afraid to lend or take risks.

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