Public sector undertakings (PSUs) have a higher frequency of board meetings. The median number for the 16 PSUs in BSE100 index was 13, compared with 11 in FY15. Coal India topped the list with 21 board meetings in the last fiscal year ended March 31. The company’s board had met seven times in FY15.
Incidentally, the sitting fees for independent directors of PSUs is Rs 40,000 - around one-third of the statutory limit of Rs 1 lakh. ICICI Bank is the only privatesector company on the list of top 10 companies, with 18 board meetings in FY19. The bank’s board had met seven times in FY15. Incidentally, a dozen companies have had a sharp year-on-year surge in the frequency of their board meetings in FY19. This list is dominated by banks, with ICICI Bank, Bank of Baroda, Punjab National Bank, State Bank of India, Yes Bank, IndusInd Bank and Axis Bank featuring among these dozen companies. Banks have been under increased scrutiny of the regulators and investors, warranting a higher engagement for their boards. Hindustan Unilever, ITC, Larsen & Toubro, HCL Technologies and REC are the other companies on this list.
Ten of the BSE 100 companies have conducted only four meetings in FY19 - the minimum needed to comply with the Companies Act 2013. Most companies on this list, such as Godrej Consumer Products, Page Industries, Lupin, Hero MotoCorp, Bharat Forge and JSW Steel, have been under performing in the past couple of years. To be sure, the median frequency of board meetings in India Inc is akin to that in the US. As per the Spencer Stuart 2018 S&P 500 Board Index, the median number of board meetings was seven for the year ended May 2018. A majority of S&P 500 company boards met on an average of six-nine times annually.
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1 Comment on this Story
Niveza Equity Research427 days ago
ICICI Bank stock seems good and potential backed by steady growth and good valuations. It’s a second largest private bank with wide clientele base and good market capture. The bank has exhibited good operating performance in latest Q2FY20 along with improved fee-based business. Additionally, there is remarkable growth in CASA with NIM improvement. Fortunately, yet there is no incidence of any major exposure of the bank to the stressful entities like its peers. The stock is expected to fetch good growth along with notable upside potential in stock prices in medium to long term investment phenomenon.
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