SEBI modifies norm on constitution of companies' boards

[K.Karthik Raja]

SEBI modifies norm on constitution of companies' boards
Tuesday, Apr 8

MUMBAI - Securities and Exchange Board of India today said it has
modified Clause 49 of the Listing Agreement, which relates to
corporate governance in listed companies.
A company will now have to maintain at least half of its board
strength through independent directors in case the non-executive
chairman is a promoter or is related to the promoter, SEBI said.
Even in case a company's non-executive chairman is related to
managerial staff at the board level or at one level below the board,
the company will have to adhere to this norm, the capital market
regulator said.
In a circular, posted on its Web site, SEBI said companies will
have to disclose the relationship between its directors in specified
filings.
SEBI further said the gap between resignation or removal of an
independent director and appointment of another independent director
should not be more than 180 days.
"This provision would not apply in case a company fulfils the
minimum requirement of independent directors in its board," SEBI said.
The regulator has also mandated that the minimum age for
independent directors should be 21 years. End
.