Public Sector Undertakings (PSUs) have always carried a dual burden: they are expected to serve national priorities while also competing in the marketplace. The real challenge lies in how the Government defines its role—whether as an “owner” or as “management”.

As an owner or majority shareholder, the Government’s responsibility is clear. It must safeguard public money, set long-term priorities, and ensure that PSUs contribute to goals such as energy security, infrastructure growth, and financial inclusion. Ownership is about direction and accountability, not about being in-charge of the shop floor.

The management of PSUs should rest with professionals. Boards and executives are better placed to make strategic and operational decisions, attract talent, and respond quickly to market changes. When Governments slip into micromanagement, PSUs often become slow, politicized, and risk-averse. When management is empowered, these enterprises can innovate, compete globally, and deliver real value.

The distinction matters. The Government should act as a responsible shareholder—setting the vision and holding management accountable—without trying to do the management’s job. Stronger Boards, clearer governance frameworks, and sharper accountability can help PSUs meet both national objectives and market expectations.

When the majority shareholder believes that ownership necessarily subsumes management, we have the perfect recipe for non-performance. A sole owner of an entity which has listed should remember that there are now other shareholders who deserve to be treated equally.

Explore corporate governance practices being followed by Maharatna and Navratna companies in our 5th Edition of Corporate Governance Survey.

– Mahima Chopra