Indian Government decided to appoint the first Chief Executive Officer (CEO) from the Private Sector professional
Two Government Officials said this effort is made to modernize its largest insurer after a disappointing stock market debut.
One of the Government Officials also mentions that the government is also planning to expand the eligibility criteria so that candidates from the Private Sector can also apply for the same. But they did not mention from which sphere the appointee might come.
Private Sector appointee to lead India larger insurer which manages Rs 41 lakh crore ($ 500.69 billion) in assets would be a first in 66 year history.
Government Officials also mention that this will be a positive sign for shareholders as they will get more choices.
The insurer’s share price has taken a beating since its listing in May last year, 30% trades lower than the price at which the shares were issued, wiping nearly Rs 2 lakh crore ($24.31 billion ) in investor wealth.
The insurer is now led by a chairman but that post will be removed when the term of the incumbent end in March, officials mentioned. Afterward according to the changes made by the Government to Govern LIC Last Year to enable through which the Government will appoint a Chief Executive from the Private Sector.
A former finance secretary Subhash Garg, agreed with the idea that professional candidates eligible to lead the insurer widened by sister, state-run firms. This move will not be harmful and is a perfectly sensible move.
While the Government decided the principle to hire people from the Private Sector, it was examining if more legal changes were required which could give salaries competitive with those of the Private Sector according to the first official.
Generally, Private Businesses pay more as compared to the Public Sector. In the past Government specified people from the Private Sector to other state–run institutions such as banks.
