Separation of CMD submit should earlier than deadline: Sebi chief

Securities and Exchange Board of India (Sebi) Chairman Ajay Tyagi on Tuesday stated the highest 500 listed firms by market capitalisation ought to put together to separate the roles of chairperson and managing director (MD) of their companies.
According to the Sebi guidelines, the highest 500 listed companies are required to separate the roles of Chairperson and MD/ CEO earlier than April 1, 2022. Tyagi, who spoke on the CII company governance summit, stated as of December 2020, solely 53 per cent of the highest 500 listed entities have complied with this Sebi provision.
“Listed entities were initially required to separate the roles of chairperson and MD/ CEO from April 01, 2020 onwards. However, based on industry representations, an additional time period of two years was given for compliance.The regulation will now be applicable to the top 500 listed entities by market capitalisation, with effect from April 01, 2022 … I urge the eligible listed entities to be prepared for this change in advance of the deadline,” stated Tyagi.
Sebi chief stated that this rule is not going to weaken the place of promoters however enhance company governance as separation of roles “will reduce excessive concentration of authority in a single individual” and in addition assist “avoid conflict of interest”.
Tyagi stated that as a way to carry stability, high quality and transparency in number of unbiased administrators and functioning of company boards, the markets regulator has floated a session paper to tighten the norms pertaining to remuneration, appointment and elimination of unbiased administrators of listed companies.
“..the proposals for appointment /re-appointment and removal of independent directors in our consultation paper, try to strike a balance between the majority shareholders’ right to the final decision and the minority shareholders’ ability to influence the same,” stated Tyagi.
On gender variety on company boards, Tyagi stated whereas the illustration of ladies on company boards have elevated from 5-6 per cent in 2014 to 17 per cent in 2021, it’s nonetheless under the 25 per cent mark at present in developed nations and the Organisation for Economic Co-operation and Development.