The 21-member Uday Kotak Committee on corporate governance may submit its report to markets regulator SEBI on October 6. It is said to have recommended a number of changes for companies with regard to listing obligations and disclosure requirements (LODR).
The proposed changes may make it mandatory for companies to hold at least five meetings a year (from four at present), extending the minimum number of directors from three to six, and increasing the number of independent directors from 33 percent to 50 percent of a company's board.
Its key recommendations are as follows:
Number of compulsory board meetings for listed firms to be extended to five, from the current four;
At least, one board meeting should be dedicated to corporate governance-related issues, and not merely financials;
Requirement of compulsory board members raised to six, from the current three;
At least one woman should be appointed as an independent director;
50% of a company's board should be composed of independent directors, up from the current 33%
The reason for asking companies to hold five board meetings is to ensure that at least one is held to discuss corporate governance issues and not quarterly financial results.
A minimum level of attendance at meetings is likely to be prescribed for each board member. Currently, many board members are known to skip all four board meetings during the year.
Among other things, the committee may not only give more voice to independent directors but also put the onus on them in case of any lapse in corporate governance.
It is said to have recommended that companies exclusively discuss strategy, succession planning, budgets, risk management, ESG (environment sustainability and governance) and board evaluation in a meeting every year.
Changes have been specified to the 'matrix reporting structure' of a company board to diversify power and responsibility.
Recommendations have been made to cut conflict of interest for public interest directors on the board of stock exchanges.
Changes with regard to independent directors for top 500 companies based on their market-cap have been recommended from April 2019. For the remaining, they can be implemented from April 2020.
Tags: Kotak, Uday Kotak, Uday Kotak Committee, SEBI, Sebi listings, Kotak Stocks, Corporate Governance, Kotak Board Meetings
Kotak committee to submit CG report to SEBI on October 6
By IndianMandarins - 2017-10-04 13:40:43
The 21-member Uday Kotak Committee on corporate governance may submit its report to markets regulator SEBI on October 6. It is said to have recommended a number of changes for companies with regard to listing obligations and disclosure requirements (LODR).
The proposed changes may make it mandatory for companies to hold at least five meetings a year (from four at present), extending the minimum number of directors from three to six, and increasing the number of independent directors from 33 percent to 50 percent of a company's board.
Its key recommendations are as follows:
Number of compulsory board meetings for listed firms to be extended to five, from the current four;
At least, one board meeting should be dedicated to corporate governance-related issues, and not merely financials;
Requirement of compulsory board members raised to six, from the current three;
At least one woman should be appointed as an independent director;
50% of a company's board should be composed of independent directors, up from the current 33%
The reason for asking companies to hold five board meetings is to ensure that at least one is held to discuss corporate governance issues and not quarterly financial results.
A minimum level of attendance at meetings is likely to be prescribed for each board member. Currently, many board members are known to skip all four board meetings during the year.
Among other things, the committee may not only give more voice to independent directors but also put the onus on them in case of any lapse in corporate governance.
It is said to have recommended that companies exclusively discuss strategy, succession planning, budgets, risk management, ESG (environment sustainability and governance) and board evaluation in a meeting every year.
Changes have been specified to the 'matrix reporting structure' of a company board to diversify power and responsibility.
Recommendations have been made to cut conflict of interest for public interest directors on the board of stock exchanges.
Changes with regard to independent directors for top 500 companies based on their market-cap have been recommended from April 2019. For the remaining, they can be implemented from April 2020.
Tags: Kotak, Uday Kotak, Uday Kotak Committee, SEBI, Sebi listings, Kotak Stocks, Corporate Governance, Kotak Board Meetings
