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Sebi flags concerns on corporate governance

Last Updated 28 April 2017, 18:17 IST

Markets regulator Sebi on Friday expressed strong concerns over corporate governance practices, particularly those related to role of independent directors.

“Auditors committee is not working, independent directors are not independent and there is no stewardship code, then definitely there are serious issues,” Sebi Chairman Ajay Tyagi told reporters here.

“This a serious issue which is engaging the attention of Sebi. We will come out with more discussion soon,” he added.

The comments assume significance in the wake of recent boardroom battle at the Tata group and the controversy surrounding the reported differences between some promoters and the top management at Infosys.

Both the cases played out in a big way in full public glare and forced Sebi and the government to keep a close watch to safeguard interest of minority investors and other stakeholders.

In January, Securities and Exchange Board of India (Sebi) had issued a ‘guidance note’ on board evaluation at listed companies.

The regulator, in its guidance note, emphasised that the role and function of chairperson in board evaluation needs to be laid out clearly in advance in order to achieve maximum benefit of the process.

Responsibilities of various persons, including independent directors, and committees for carrying out evaluation of respective boards as well as the relevant disclosure requirements under corporate governance obligations have also been touched upon in the note.

It has advised that the nomination and remuneration committee will have to formulate the criteria for evaluation of performance of independent directors and other members of the board.

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(Published 28 April 2017, 18:17 IST)

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