New Delhi, Nov 30 (IANS) Companies should have the option of paying fixed contractual remuneration to non-executive and independent directors, according to the recommendations of a committee set up by the Confederation of Indian Industry (CII).
“Companies should have a choice between paying a commission on profits or paying fixed contractual remuneration,” the CII Task Force on Corporate Governance said in its recommendations released Monday.

The industry lobby made 25 recommendations “with an objective to establish higher standards of probity and corporate governance in the country”.

It called for setting up a “well-informed and independent” board and an audit committee for companies, separation of the offices of the chairman and the chief executive, independence of firms from clients, and instituting a mechanism that allows employees to report concerns about unethical behaviour or fraud.

The task force also urged the government and the capital market regulator, Securities and Exchange Board of India (SEBI), to work hand-in-hand to ensure corporate governance.

Calling the media a stakeholder, the CII report said: “Media has an important part to play in raising general awareness and understanding of corporate governance and potentially as a watchdog in the area of corporate governance.”

According to the task force, quality in the audit process is an imperative in ensuring corporate governance.

“The government should intervene to strengthen the ICAI Quality Review Board and facilitate its functioning of ensuring the quality of the audit process through an oversight mechanism,” it said.

The quality review board, set up by the government in July 2007, reviews the quality of services rendered by the members of the Institute of Chartered Accountants of India (ICAI).