Stock Exchange Board of India (hereinafter referred as 'SEBI') has
setup up committee under the chairmanship of Shri Uday Kotak, Executive Vice
Chairman and Managing Director of Kotak Mahindra Bank on 2nd June, 2017, to
advice on issues relating to corporate governance.
The committee was further required to submit the report within the
period of four months and after followed meetings and discussions carried, the
23 Members of committee submitted its 177 pages report on Thursday, 05th
October, 2017 to SEBI which had invited public comments on the proposed
recommendations till November 2014.
The report of the committee is divided in 11 Chapters and various
Annexures; approach has been made to focus on addressing immediate challenges
and gaps in governance.
Please find link of original report: http://www.sebi.gov.in/reports/reports/oct-2017/report-of-the-committee-on-corporate-governance-for-public-comments_36178.html
Chapter I |
COMPOSITION AND ROLE OF THE BOARD OF DIRECTORS |
Number of Board of Directors (w.e.f 1st October, 2018) |
Minimum 6 Directors recommended on BOD of Listed Entity. (As per the provisions of the Companies Act,2013 and rules
prescribed therein minimum 3 directors were required in public company
and No specific provision existed in SEBI LODR Regulations) |
Gender Diversity (w.e.f 1st October, 2018) |
At least 1 Independent Women
Director recommended on BOD. (As per the provisions of the Companies Act,2013 and rules
prescribed therein and as per provision existed in SEBI LODR Regulations
[17(1)(a)] it requires one women director on its BOD) |
Minimum Attendance Criteria (w.e.f 1st April, 2018) |
At least 50% attendance in meeting of the total number of board
meetings over two consecutive financial years on a rolling
basis, commencing from the financial year immediately succeeding the date
of appointment. His/her Continuance on the board shall be subject to
ratification by the shareholders at the next annual general meeting
(notwithstanding the nature of directorship). (As per the provisions of the Companies Act,2013 and rules
prescribed therein it calls for the automatic vacation of the office of
director if a director is absent from all meetings of the board of directors
held during a 12-month period No specific provision existed in SEBI LODR
Regulations) |
Disclosure of Expertise/ Skills of Directors (w.e.f. FY ending March 31, 2019/March 31, 2020 as applicable) |
It requires to list the competencies/expertise
that it believes
its directors should possess It requires disclosing the list of competencies/expertise that
its board members actually possess. As required in the context of its business (es) and sector(s)
for it to function effectively. (As per the provisions of the Companies Act,2013 and rules
prescribed therein and SEBI LODR Regulations require the disclosure of a
brief profile of a director on his/her appointment, including expertise
in specific functional areas. However, there is no specific requirement
under the Companies Act or SEBI LODR Regulations for listed entities) |
Approval for Non-executive Directors (NED) on Attaining a
Certain Age (w.e.f 1st October, 2019) |
Special resolution will be required
for the
appointment/continuation of NEDs on attaining the age of 75 years for the
relevant term along with the justification for appointing such a person. (The Companies Act provides that a person may be
appointed/continue as Managing Director (hereinafter referred to as
'MD'), whole-time director or manager on attaining the age of 70 years
by passing a special resolution. However, no such provision exists for
non-executive directors) |
Minimum Number of Meetings (w.e.f 1st April, 2018) |
At least 5 Board Meetings within maxim gap of 120 days. At least 1 Board meeting to carry specifically
discussion on
strategy, budgets, board evaluation, risk management, ESG (environment,
sustainability and governance) and succession planning (As per the provisions of the Companies Act,2013 and rules
prescribed therein and SEBI LODR Regulations only 4 board meetings were
required within maxim gap of 120 days) |
NED Engagement with the Management (w.e.f 1st April, 2018) |
Recommended that at least once every year, an interaction
should be required between the NEDs and senior management (No specific provisions under Companies Act, 2013 and SEBI LODR
Regulations_ |
Quorum for Board Meetings (w.e.f 1st October, 2018) |
Presence of at least one independent
director in every board
meeting and minimum of three directors or one-third of the total
strength of the board of directors, whichever is higher, (As per the provisions of the Companies Act,2013 it requires
2/3 of the total strength of the board of directors or two directors,
whichever is higher, for every board meeting and No specific provision
existed in SEBI LODR Regulations) |
Separation of the Roles of Non-executive Chairperson and
Managing Director/CEO (w.e.f. April 1, 2020/April 1, 2022, as applicable) |
Listed entities with more than 40% public
shareholding should
separate the roles of Chairperson and MD/CEO with effect from April 1,
2020. After 2020, SEBI may examine
extending the requirement to all
listed entities with effect from April 1, 2022 (As per the provisions of the Companies Act,2013 provided the
individual cannot be appointed/reappointed as the chairperson of a
company as well as its MD/CEO at the same time unless provided as
prescribed and SEBI LODR Regulations do not mandate a separation of the
posts of chairperson and chief executive officer of the listed entity but
state that it is a discretionary requirement) |
Maximum Number of Directorship (w.e.f. April 1, 2019/April 1, 2020,as applicable) |
It recommends that the maximum number of
directorships in listed
entities should be reduced to seven(irrespective of whether the person
is appointed as an independent director or not). (The Companies Act provides that the maximum number of public
companies in which a person can be appointed as a director shall not
exceed ten. SEBI LODR Regulations state that a person shall not serve as
an independent director in more than seven listed entities and if the
director is a whole time director in one listed entity, then he/she
can't serve as an independent director in more than three listed
entities.) |
Chapter II |
THE INSTITUTION OF INDEPENDENT DIRECTORS |
Minimum Number of Independent Directors |
At least 50% of BOD shall comprise Independent Directors 1.
with effect from April 1, 2019, for the top 500
listed entities 2.
With effect from April 1, 2020, for all listed
entities. (the Companies Act requires every listed company to have at
least one-third of total number of directors as IDs and SEBI LODR
Regulations impose stricter obligations that require at least half of
the total directors of the board of a listed entity to be IDs if the
Chairperson is executive/related to the promoter, and in other cases, at
least one-third IDs) |
Eligibility Criteria (w.e.f 1st April, 2018) |
the Committee recommends the revision of eligibility criteria
for a director to be an 'independent director' to also include the
following: (i) Specifically exclude persons who constitute the 'promoter
group' of a listed entity; (ii) Requirement of an undertaking from the ID that such a
director is not aware of any circumstance or situation, which exists or
may be reasonably anticipated, that could impair or impact his/her
ability to discharge his/her duties with objective independent
judgments and without any external influence. (iii) The board of the listed entity taking on record the above
undertaking after due assessment of the veracity of such undertaking. (iv) Exclude 'board inter-locks' arising due to common
non-independent directors on boards of listed entities (i.e. a
non-independent director of a company on the board of which any
non-independent director of the listed entity is an independent director,
cannot be an independent director on the board of the listed entity). It also calls for continuous assessment and may be required to
certify every year that each of its IDs fulfils the conditions specified
in the SEBI LODR Regulations and is independent of the management. (Presently Section 149(6) of the Companies Act and Regulation
16(1)(b) of the SEBI LODR Regulations set out certain objective criteria
for determination of independence of a director) |
Minimum Compensation to Independent Directors (w.e.f 1st April, 2018) |
Minimum Compensation and sitting fees have been
prescribed irrespective of adequate and inadequate profits (As per the provisions of the Companies Act,2013 it provides
for ceiling on the compensation that can be paid to directors, there is
no requirement for minimum compensation to be paid, except that the
sitting fee paid to IDs cannot be lower than that of other directors and
No specific provision existed in SEBI LODR Regulations) |
Disclosures on Resignation of Independent Directors (w.e.f 1st April, 2018) |
Detailed reason of resignations by IDs to be provided to enhance
transparency and strengthen the institution of IDs (As per the provisions of the Companies Act,2013 reason
required by ROC if directors resigned before expiry of same and No
specific provision existed in SEBI LODR Regulations) |
Directors and Officers Insurance for Independent Directors (w.e.f 1st October, 2018) |
Recommended to undertake insurance for ID to protect from
significant responsibilities and liabilities. (As per the provisions of the Companies Act,2013 company to
undertake Directors and Officers Insurance for Independent Directors is
optional and No specific provision existed in SEBI LODR Regulations) |
Induction and Training of Independent Directors (w.e.f 1st April, 2018) |
To undertake the formal induction programmes process to
familiarize the independent directors through various programmes (The Companies Act provides general clauses pertaining to
training, induction, etc. of directors. SEBI LODR Regulations require
familiarization of the IDs relating to certain specified matters.
However, specific provisions on induction training and periodicity of
continuous updation are lacking) |
Alternate Directors for Independent Directors (w.e.f 1st October, 2018) |
It is recommended that appointment of an alternate director for
IDs should not be permitted, as IDs are elected for unique qualities. (As per the provisions of the Companies Act,2013 and SEBI LODR
Regulations does not provide for alternate director for ID) |
Lead Independent Appointment |
The Committee recommends the following: 1. All listed entities where the Chairperson is not independent
to designate an ID as the Lead ID; 2. The Lead ID should be a member of NRC; 3. The Lead ID shall: a) lead exclusive meetings of the IDs and provide feedback to
the Chairperson/board of directors after such meetings; b) Serve as liaison between the chairperson of the board and
the IDs; c) Preside over meetings of the board at which the chairperson
or vice-chairperson is not present, including executive sessions of the
IDs; d) Have the authority to call meetings of the IDs; and e) If requested by significant shareholders, ensure that he/she
is available for consultation and direct communication. (Currently, there is no requirement of a Lead ID in Companies
Act/SEBI LODR Regulations) |
Filing of Casual Vacancy of independent Director (w.e.f 1st April, 2018) |
Recommends that any appointment to fill a casual vacancy of
office of any ID should also be approved by the shareholders at the next
general meeting (Presently Section 161(4) of the Companies Act , schedule IV
and Regulation 25(6)of the SEBI LODR Regulations set out certain
provisions for Filing of Casual Vacancy of independent Director) |
Chapter III |
BOARD COMMITTEES |
Minimum Number of Committee Meetings (w.e.f 1st April, 2018) |
Recommended following number of meeting for committees
respectively Atleast5 meetings for Audit Committee Atleast1 meeting of every other committee(nomination and
remuneration committee, Stakeholders Relationship Committee and Risk
Management Committee) (Currently, SEBI LODR Regulations require at least four
meetings of the Audit Committee every year not for any other committee) |
Role of Audit Committee (w.e.f 1st April, 2018) |
Audit committee to scrutinize end utilization of fund (Presently Section 177 of the Companies Act , schedule IV and
Regulation 18(2)(c) of the SEBI LODR Regulations set out certain
provisions for role of Audit Committee) |
Composition of Nomination and Remuneration Committee (w.e.f 1st April, 2019) |
Committee recommends the requirement of having atleast 2/3rd of
its independent directors on NRC. (Under the Companies Act, the Audit Committee and the
Nomination and Remuneration Committee (hereinafter referred to as 'NRC')
are required to have at least half of their members as IDs. On the other
hand, under SEBI LODR Regulations, while the Audit Committee is required
to have 2/3rd of its members as IDs, the NRC are required to have only
half of its members as IDs.) |
Role of Nomination and Remuneration Committee (w.e.f 1st April, 2018) |
Greater role of NRC, including setting of compensation of KMPs (Presently Section 178 of the Companies Act and Regulation
Schedule II of Corporate Governance of the SEBI LODR Regulations set out
certain provisions forRole of Nomination and Remuneration Committee) |
Composition and Role of Stakeholders Relationship Committee |
at least three directors as members of the SRC, with at least one
being an ID. the Chairperson of the SRC be present in the annual general
meeting to answer queries of the security holders the role of the SRC be widened (Presently Section 178 of the Companies Act and Regulation [Reg
20]of Corporate Governance of the SEBI LODR Regulations set out certain
provisions Composition and Role of Stakeholders Relationship Committee) |
Quorum for Committee Meetings. (w.e.f 1st April, 2018) |
NRC Committee: either two members or one third of the members
of the committee, whichever is greater, with at least one independent
director. SRC Committee: either two members or one third of the members
of the committee, whichever is greater, with at least one independent
director. (Under the Companies Act, no quorum requirement and SEBI LODR
Regulations specifies quorum requirement for meetings of the
Audit committee but not for other committees) |
Applicability and Role of Risk Management Committee (w.e.f 1st April, 2018) |
Requirement of risk committee extended upto top 500 companies
amid growing cyber threat earlier it was top 100 committees (Under the Companies Act, no such requirement is provided) |
Membership and Chairpersonship Limit (w.e.f 1st April, 2018) |
Cap on number of committee for each member is recommended (Presently no provisions under the Companies Act and
Regulation 26 of the SEBI LODR Regulations set out certain provisions) |
Information Technology Committee |
Listed entities may constitute an information technology
committee which, in addition to the risk management committee, will focus
on digital and other technological aspects. (Under the Companies Act/ SEBI LODR , no such provision is
provided) |
Chapter IV |
ENHANCED MONITORING OF GROUP ENTITIES |
Obligation on the Board of the Listed Entity with Respect to
Subsidiaries |
Recommended that at least one Independent director of listed
entity to be director on the board of directors of an unlisted material
subsidiary Incorporated in India. The same may be extended to unlisted
foreign material subsidiaries as well for better monitoring at a
consolidated level. (The Companies Act does not provide for the board of the listed
entity to oversee the affairs of its subsidiaries. SEBI LODR
Regulations, however, impose specific obligations on the board of the
listed entity with respect to its subsidiaries) |
Secretarial Audit |
It is recommended that Every listed entity and its material
unlistedsubsidiaries incorporated in India shall undertakesecretarial
audit mandatorily. (Provisions of Companies Act, 2013 provides with secretarial
audit of listed and unlisted entities however there is no specific
provision for secretarial audit under SEBI LODR Regulations.) |
Chapter V |
PROMOTERS/CONTROLLING SHAREHOLDERS AND RELATED PARTY
TRANSACTIONS |
Sharing of Information with Controlling Promoters/Shareholders
with Nominee Directors |
Formal framework is recommended for sharing sensitive
information with the non-board members. |
Re-classification of Promoters/Classification of Entities as
Professionally Managed |
Committee recommends creation of 'designated person' for
sharing of information and introduce a mechanism to enable such
reclassification, to ensure that persons who may have been promoters but
are no longer in day-to-day control and management And have a low shareholding, should have an 'opt-out' from
being classified as 'promoters. |
Disclosure of Related Party Transactions (w.e.f 1st April, 2018) |
Recommendations: • RPTS to be disclosed once in every six months • Strict penalties may be imposed by SEBI for
failing to make requisite disclosures of RPTs. • all promoters/promoter group entities that hold
20%or above in a listed company to be considered 'related parties' for
the purposes of the SEBI LODR Regulations. • disclosures of transactions with
promoters/promoter group entities holding 10% or more shareholding be
made annually and on a half yearly basis (even if not classified as
related parties). (The Companies Act 2013 / SEBI LODR Regulations contain
provisions on disclosure of related party transactions in the board's
report, approval of the shareholders in certain cases, etc.) |
Approval of Related Party Transactions (w.e.f 1st April, 2018) |
Committee is of the view that similar to the Cos. Act, the SEBI
LODR Regulations may be amended to allow related parties to cast a
negative vote, as such voting cannot be considered to be in conflict of
interest. (The Companies Act 2013 provides that a shareholder cannot vote
to approve a contract or transaction which may be entered into by a
company if such a shareholder is a related party to that transaction.
However, SEBI LODR Regulations have a blanket restriction on related
parties voting on any resolution pertaining to a material related party
transaction.) |
Royalty and Brand Payments to Related Parties |
Special Resolution required if royalty/brand payments exceeds 5%
of turnover to make better disclosures on the value a company derives
from
a brand or technology for which it has agreed to pay royalty, brand, or
technical fees to the parent company/promoters. |
Remuneration to Executive Promoter Directors |
Cap on remuneration of promoter-director is recommended in
following manner: shareholder approval by special
resolution should be required if
the total remuneration paid: a)
to a single executive promoter-director exceeds Rs. 5 crore or
2.5% of the net profit, whichever is higher; or b)
to all executive promoter-directors exceeds 5% of the net profits. (Celing limit is provided under the Companies Act, 2013 however
no specific provisions in SEBI LODR Regulations) |
Remuneration of Non-executive Director (w.e.f 1st April, 2018) |
Shareholder approval will be required if in case the
remuneration of a single non-executive director exceeds 50% of the pool
being distributed to the non-executive directors as a whole. (As per provisions of Companies Act, 2013, shareholder approval
is required when remuneration payable to such directors exceeding 1% of
the net profits in case there is a managing director or whole time
director or manager and 3% in other cases) |
Materiality Policy (w.e.f 1st April, 2018) |
The Committee considered that clear threshold limits is
required to be disclosed in the materiality policy. The Committee also
recommends that such materiality policy should be reviewed and updated
at least once every three years. (Currently, SEBI LODR Regulations require listed entities to
formulate a policy on materiality of related party transactions and on
dealing with related party transactions.) |
Chapter VI |
DISCLOSURES AND TRANSPARENCY |
Submission of Annual Reports |
Only soft copy of the annual report should be given to all
shareholders who have registered their email addresses either with the
company or with the depository, unless the shareholder specifically asks
for a physical copy. Only in case the shareholder has not provided
his/her e-mail address, should he/she be sent a hard copy (SEBI LODR Regulation 34 & 36 and provisions of Companies Act,
2013 and rules prescribed therein contains details provisions for
submission of annual reports) |
Harmonization of Disclosures |
Committee recommended that: • Stock exchanges shall collectively
harmonize the
formats of the disclosures made by the listed entities on their
respective websites no later than April 1, 2018;
• Stock exchanges shall move to disclosures by
listed entities on exchange platforms in XBRL format in latest available
taxonomy no later than April 1, 2018; • Further, a common filing platform may be devised
on which a listed entity may submit all filings, which could then be
disseminated to all exchanges simultaneously. The exchanges shall
introduce such a platform in consultation with SEBI by April 1, 2018. • The disclosures filed with the exchanges may, as
far as possible, be harmonized with the filings made to MCA. |
Searchable Formats of Disclosures |
All the disclosures made by the listed entity on its website
and submitted to the stock exchanges should be in a searchable format
that allows users to find relevant information easily. |
Disclosures |
Pertaining to holders of Depository
Receipts • Details of ADRs, GDRs holders with 1% of
shareholding to be disclosed. Credit Ratings • Updated list of all credit ratings to be made
available at one place for each company Key Changes in Financial Indicators • all listed entities may be required to disclose
in the section on Management Discussion and Analysis (MD&A) in the
Annual report, certain key financial ratios (or sector-specific
equivalent ratios), as applicable, wherever there is a change of 25% or
more in a particular financial year, along with detailed explanations
thereof, Pertaining to Analyst/Institutional Investor Meets • Disclosure of schedules of analyst/institutional
investor meetings is not required as it does not serve any kind of
practical purpose. In valuation Report in schemes of Arrangements • to consider issuing guidelines Specific
disclosures on assets, liabilities and turnover of the entities involved
should be • disclosed in the valuation reports on schemes of
arrangements to avoid divergent market practices of disclosures made in
valuation reports Pertaining to Directors • details of directorships of a director as
included in the Corporate Governance section of the Annual Report Pertaining to Disqualification of Directors • Disclosures on disqualification of directors to
be made in annual reports to be certified by a practicing company
secretary Website • Separate section for investors on its website and
provide all the information mandated to ensure ease of availability and
access of pertinent information in one place to investors and regulators
alike. Subsidiary Accounts • Audited financial statements for the relevant
financial year of each of its subsidiaries available on its website at
least 21 days before the date of the annual general meeting. Long-term and Medium-term Strategy • Disclosures to be made of hedging strategy |
Prior Intimation of Board Meeting to Discuss Bonus Issue |
Advance notice to be served to stock exchange for consideration
of issue of bonus issue by BOD due to price sensitive nature transaction. (Currently, SEBI LODR Regulations require prior intimation,
However, where the declaration of bonus by the listed entity is not on
the agenda of the meeting of board of directors, prior intimation is not
required to be given to the stock exchanges.) |
Views of Committees Not Accepted by the Board of Directors (w.e.f 1st April, 2018) |
Any recommendations by any committee, if not
accepted by the BOD
which is mandatorily required, in the relevant financial year, the same
to be disclosed along with reasons thereof. |
Chapter VII |
ACCOUNTING AND AUDIT RELATED ISSUES |
Audit Qualifications |
Quantification of qualifications to be mandatory. (Currently, under the Companies Act, or SEBI LODR Regulations,
there is no restriction on an auditor qualifying the accounts of a
company. Specifically, the SEBI LODR Regulations require quantification
of the audit qualification by the auditor and if not possible, the
management shall make an estimate which is to be reviewed by the
auditor.) |
(w.e.f 1st April, 2018) |
|
Independent External Opinion by Auditors |
Auditors should have rights to obtain independent external
opinions (There is no specific provisions either in the Companies Act or
in SEBI LODR Regulations enabling an auditor to obtain an independent
external opinion) |
Quarterly Financial Disclosures (w.e.f 1st April, 2018) |
More quarterly disclosures on consolidated basis, In order to
strengthen periodic financial disclosures (There is no specific provisions either in the Companies Act
however SEBI LODR regulations provides for detailed provisions for
submission of quarterly reports) |
Disclosure of Reasons of Resignation of Auditors (w.e.f 1st April, 2018) |
Detailed Reason for resignation of auditors to be given. (As per the provisions of the Companies Act, 2013, requires
that upon the resignation of auditors, reasons for such resignation shall
be filed with the company and the Registrar.) |
Disclosures on Audit and Non-audit Services (w.e.f 1st April, 2018) |
Disclosure total fees for all services paid by the listed
entity and its subsidiaries (i.e. on a consolidated basis) to the
statutory auditor and all entities in the network firm/network entity of
which the auditor is a part (There is no requirement in either the Companies Act or the
SEBI LODR Regulations on disclosure of non-audit services rendered by
the auditor to the entire network/group. It only speaks about audit
services) |
Audit Quality Indicators (w.e.f 1st April, 2018) |
Audit Quality indicators to be made publicly to increase in
transparency. (There is no specific provision in the Companies Act or SEBI
LODR Regulations with respect to audit quality indicators) |
Disclosures of Credentials and Audit Fee of Auditors (w.e.f 1st April, 2018) |
Disclose Credentials and Fees for appointment of auditors (As per Companies Act, 2013 it provides for certain provisions
for remuneration to auditors and certain disclosures norms therein While
the SEBI LODR Regulations do not prescribe any specific disclosures) |
IND-AS Adoption (w.e.f 1st April, 2018) |
IndAS implementation for all entities including banks , NBFCs
and insurance companies |
Strengthening Monitoring, Oversight and Enforcement by SEBI |
Powers to SEBI to act against Auditors and Other Statutory
Third Party Fiduciaries More Powers to ICAI, regulator of auditors Note: Dissenting View: The ICAI has expressed its dissent on
the above recommendation as the regulation of chartered accountants is
covered under the Chartered Accountants Act, 1949 and to
avoid jurisdictional conflict and other issues |
Chapter VIII: |
INVESTOR PARTICIPATION IN MEETINGS OF LISTED ENTITIES |
Timeline for Annual General Meetings of Listed Entities (w.e.f 1st April, 2018) |
AGM of top 100 listed entities to be conducted within 5
months from the closure of financial year (Over time, the target may be
to reduce the timeline to four months) Where top 100 listed entities :As per market
capitalization (as at the end of the previous financial year) (As per the provisions of the Companies Act,2013, AGM should be
conducted within 6 months from the closure of financial year and no
specific provision in SEBILODR Regulations on this matter) |
E-voting and Webcast of Proceedings of the Meeting (w.e.f 1st April, 2018) |
Live web-cast for all shareholder meetings; e voting deadline
to be extended from 5 pm to midnight. (As per the provisions of the Companies Act,2013 and prescribed
rules therein it provides e voting was permitted upto 5 pm and as per
SEBI LODR Regulation remote e voting is mandatory for all shareholders) |
Stewardship Code |
SEBI to introduce common stewardship
code for all institutional
investors Stewardship code: Is engaging oneself towards institutional
investors/clients/beneficiaries and fulfilling their responsibilities
through monitoring and to cover aspects such as better monitoring of
investee companies. (There is no specific provision for a 'stewardship code' under
SEBI LODR, however IRDAI in March 2017 issued a stewardship code for
insurance companies in India.) |
Treasury Stock |
Voting rights on treasury stock to be
withdrawn is recommended;
where treasury stock means shares in its own name or in the name of any trust either on its behalf or on behalf any
of its subsidiary or associate companies (As per the provisions of the Companies Act,2013
prohibits the creation of treasury stock and no specific provision
in SEBI LODR regulations) |
Resolutions sent to Shareholders without Board's recommendation |
Additional disclosures and safeguards to be
made in general
meeting whenever under exceptional circumstances resolution being sent
to shareholder does not receive any recommendations from Board of
Directors. (There is no general rule either in the Companies Act or in
SEBI LODR Regulations that every resolution placed before the
shareholders should have been recommended by the board of directors.) |
Chapter IX |
GOVERNANCE ASPECTS OF PUBLIC SECTOR UNDERTAKINGS |
The Committee recommends that the listed PSEs fully comply with
the provisions of SEBI LODR Regulations and the same be suitably
enforced. The following key guiding principles must be kept in mind for
such assessment on this subject: • Independence of PSUs from administrative ministry • Consolidation of government stake in listed PSUs
under holding entity structure • Setting up Independent board with diversified
skill sets. |
Chapter X |
LENIENCY MECHANISM |
Grant of leniency and protection against
victimization to
whistle blowers (Section 24B of the SEBI Act and Section 23O of the Securities
Contracts (Regulation) Act, 1956 ('SCRA') provide powers to the Central
Government (based on recommendations by SEBI) to grant immunity both
from prosecution and imposition of penalty under the SEBI Act and the
SCRA for the alleged violation, subject to certain conditions) |
Chapter XI |
CAPACITY BUILDING IN SEBI FOR ENHANCING CORPORATE GOVERNANCE IN
LISTED ENTITIES |
Increase staff strength at SEBI to improve monitoring and
enforcement Revolving-door policy between SEBI and private sector Greater coordination between SEBI and MCA |
DISCLAIMER: The entire contents of this document have been developed on the basis of relevant information and are purely the views of the authors. Though the authors have made utmost efforts to provide authentic information however, the authors expressly disclaim all or any liability to any person who has read this document, or otherwise, in respect of anything, and of consequences of anything done, or omitted to be done by any such person in reliance upon the contents of this document.
READER SHOULD SEEK APPROPRIATE
COUNSEL FOR THEIR OWN SITUATION. I SHALL NOT BE HELD LIABLE FOR ANY OF THE
CONSEQUENCES DIRECTLY OR INDIRECTLY.
Published by
Anjali Gorsia
(Practicing Company Secretary)
Category
Corporate Law
Report
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