Dissatisfaction and concerns among staffers have arisen yet again at the Securities and Exchange Board of India (Sebi) over the appointment of an external executive director (ED).
A letter on June 26, from the Sebi Employee Association (SEA) to chairman Ajay Tyagi says, “External candidates may be considered only when no suitable internal candidates are available.”
On Friday, Sebi had put out an advertisement inviting applications for recruitment of two EDs on contractual or deputation basis for a period of three years and asked the candidates to apply by July 17.
At present, there are a total of eight EDs, of which the contracts of two — Sujit Prasad and Anand Baiwar– are ending in October and November respectively. The total sanctioned strength for the post is nine.
This isn’t the first time employees have raised concerns on hiring external candidates for the post. In 2017, a similar issue had been raised, seeking change in a rule that said the regulator has to recruit half the EDs from outside.
However, giving in to employee demand, the market regulator had decided to increase the number of ED posts to nine from eight, six of which would be for staffers and the rest, lateral or on deputation basis.
“At the time of the last promotion of internal candidates to ED level, it had been given to understand that appropriate changes would be made in the Employee Service Regulations to reflect the stream-wise posts for EDs, in line with the separate streams till the level of cheif general managers (CGMs). No progress has been made for bringing clarity on this issue,” SEA said in its June 26 letter.
“In all of our submissions, we have been motivated by the goal to ensure that the most appropriate and best qualified candidates are considered for the posts taking into account the requirements for these positions as well as the qualifications and experience necessary to fulfill these positions,” it added.
Interestingly, excluding the two whose contracts are ending, the other six EDs are Sebi internal employees.
“SEA has always argued that candidates for the post of ED must have relevant operational knowledge and experience, irrespective of whether they are taken internally or externally. The experience with ED appointments in the last more than 5 years has vindicated SEAs submissions that the most appropriate and qualified candidates have been found internally,” they highlighted.
It further said while specialization has been recognized till the level of CGMs in SEBI, unfortunately, at ED level, the regulations do not formally recognize this specialization in terms of qualifications or stream-wise specialisation. This, along with failure to recognize internal experience and expertise, could potentially lead to less than appropriate appointments. Thus, the number of ED posts may be rationalized based on stream-wise functional specialization with adequate consideration to staff strength.
SEA also cited Sebi history and said that it had seven EDs back in the year 2000 with a staff strength of less than 400, today Sebi has only nine EDs while staff strength has more than doubled to around 900. The hierarchy above EDs has also expanded to four Whole Time Members, whereas there were no such post in 2000, it added.