LIC has now put in place a framework for appointment of ‘shareholders’ director’ in its board.
This framework — which has been introduced through a new regulation — comes 18 months after the country’s largest life insurer came up with a mega initial public Offering (IPO) billed as the biggest float in the history of Indian primary market.
The issue was essentially an offer for sale of 22.13 crore shares equivalent to 3.5 per cent stake of the government and helped the Centre mop up Rs. 20,500 crore.
The Centre currently holds 96.5 per cent stake in LIC. Besides the Chairperson Siddhartha Mohanty, the LIC Board currently has four Managing Directors, nine independent directors and one Government nominee director, MP Tangirala. The regulation on shareholders’ director has been issued under the Life Insurance Act 1956.
The new framework provides that LIC shall elect — upon receiving a notice from not less than 1,000 shareholders or one tenth of total number of shareholders, whichever is lower — a shareholders’ director through a general meeting of such shareholders, sources said. A shareholders’ director would be appointed by the board for four years and would be eligible for re-election and reappointment for another four years, according to the new framework.
