The market regulator had in June 2017 set up a committee on corporate governance under the Uday Kotak with a view to seeking recommendations to further enhance the corporate governance norms for the listed companies.
One of the recommendations that the Committee came out with was the separation of the roles of chairperson and MD/CEO of listed companies. This was proposed to provide a better and more balanced governance structure by enabling more effective and objective supervision of the management.
The Sebi board, in its meeting in March 2018 approved the proposal for top 500-listed entities. Later the deadline for compliance was extended by two years in January 2020.
“As things stand now, the provision for mandating separation of the role of chairperson and MD/CEO of listed companies will be applicable from April 01, 2022 for top 500 companies.
“As the revised deadline is less than two months away, on a review of the compliance status it is seen that the compliance level,which stood at 50.4 per cent amongst the top 500 listed Companies as on September 2019, has progressed to only 54 per cent as on December 31, 2021,” Sebi said.
Sebi said it received representations from industry bodies and corporates expressing various compelling reasons, difficulties and challenges for not being able to comply with this regulatory mandate.
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