Here’s a look at how the new corporate governance norms will affect India Inc boardrooms.
The Securities and Exchange Board of India has accepted most of the recommendations proposed by the Kotak Committee on corporate governance.
These are around structuring of boards, additional audits and enhanced disclosures and obligations.
Here’s a look at how the new norms will affect India Inc boardrooms:
Proposal: Maximum number of directorships at listed firms reduced from 10 to 8 and further to 7
Deadline: From 10 to 8 by April 1, 2019, and to 7 by April 1, 2020
Current status: Only one individual holds 10 director positions; one holds nine and one holds eight
Proposal: Minimum 6 directors on board
Deadline: April 1, 2019 for top 1,000 companies (by m-cap); April 1, 2020 for top 2,000 companies
Current status: 65 of the top 1,000 firms have less than 6 board members
Proposal: To have at least 1 woman independent director
Deadline: April 1, 2019 for top 500 companies; April 1, 2020 for top 1,000 companies
Current status: 155 of the top 500 and 336 of the 1,000 companies don’t have any women independent director
Proposal: Separation of CEO and chairperson position
Deadline: Initially, applicable to only top 500 listed firms from April 1, 2020
Current status: 165 of the top 500 companies have same person as CEO and chairperson. Some of these include Reliance Industries (Mukesh Ambani), Wipro (Azim Premji), Adani Ports and SEZ (Gautam Adani)
-- Information source: Prime Database