The Life Insurance Corporation of India is creating post for Managing Director and Chief Executive Officer instead of having an Executive Chairman.
- These changes have been outlined in backdrop of launch a mega initial public offering.
- Life Insurance Corporation will have instead of an Executive Chairman on the line of public sector banking industry.
- Changes were made by Department of Financial Services under Finance Ministry by amending Life Insurance Corporation of India (Employees) Pension (Amendment) Rules.
- Some other rules have also been amended under LIC Act of 1956.
- After amendment, LIC will now be governed by Companies Act and Sebi Act. It will also require to prepare its quarterly balance sheet with profit or loss figures.
Who will appoint CEO and MD?
The Managing Director and Chief Executive Officer will be appointed by the Central Government under section 4 of the LIC Act of 1956.
LIC’s top management
Currently, LIC top management comprises of Executive Chairman and four Managing Directors. Chairman of LIC is a government of India Secretary rank officer. As the executive powers will now go to proposed Managing Director and CEO, LIC is likely to get Non-executive Chairman. Non-executive chairman would chair the board meetings. Role and designation of four MDs of LIC is not yet clear.
Scenario in other public sector entities
Posts of Chairman and Managing Director in nationalised banks are split. State Bank of India has an Executive Chairman and four MDs. SEBI had recently underlined that post of Chairman and Managing Director of listed companies need to be split from 1st April 2022. SEBI is of the view that, separation of roles will reduce excessive concentration of authority in single individual.
LIC to have MD and CEO to Substitute Chairman LIC to have MD and CEO to Substitute Chairman