On April 1, 2019, a series of corporate governance issues by the Securities Exchange Board of India (SEBI) will take effect. These reforms directly affect the actions of boards of directors at companies listed in the country, and put in a strict framework of corporate governance. As the SEBI has made it clear that the process continues to work.
The new Delhi-based law firm PSA, include:
- Board composition is redefined: The minimum number of board members is raised to six from three – as had been required by the India Companies Act of 2013 .
- At least one member of the board of directors must be a woman – this may be an executive or non-executive director. Compliance is due by April 1 of this year for larger companies, and by April 1, 2020 for smaller ones.
- The Chairman of the Board must not hold the position of Chief Executive Officer or Managing Director. The chairman must be considered a non-executive director.
- A non-executive director may not be an executive director at another company – the term used is “interlock.”
- In the interest of minority shareholders, in each board meeting at least one independent director is now required to be present. Non-executive directors must not be less than executive directors – this should be the case, shareholders must approve it.
- Compliance requirements are imposed on the resignation of an independent director.
- E-voting is now a mandatory option for all shareholders. The top 100 listed companies must also provide webcasts of all AGMs. Annual reports must be submitted via email to all shareholders. The listed company’s website must include a copy of the annual report, details of board / committee composition, code of conduct, policies, etc. under separate sections.
- Promoters – that is, who has a stake in the Company (as defined by Section 2 (69) of the Companies Act) promoters in managing companies.
- Board of directors must make a public report annually on the outcomes of board evaluations, whether external or internal.
“For shareholders, these changes, in their fully-implemented avatar, will definitely be in a new era of transparency, accountability and corporate governance,” according to Cyril Amarchand Mangaldas. Indian listed companies wants to implement the changes.
Ongoing Corporate Governance Reform – how far will it go?
The movement to reform law and regulations governing companies in India is a broad one. There are also cases in which the company has a policy of change, which is to say that it does not apply to a company or a company.
Kotak Committee, (named after its chairman, the well-known banker Uday Kotak), which was submitted to the SEBI on 2 June 2017. The report from the Kotak Committee called for a total of 42 changes in the current corporate governance code, but the SEBI has so far only implemented 18 of these proposals.
India’s corporate governance is increasingly brought into line with international standards.
“In its 2018 report on corporate governance in key Asian jurisdictions, the Asian Corporate Governance Association gave a score of 54 per cent to the Indian corporate governance regime, ranking it seventh among 12 Asian countries. Similarly, SAHA Ratings, in its 2018 World Corporate Governance Index of 150 countries, placed India in Group 2, but still in the field of corporate governance, “the note points out.
While these sentences have been passed, Indian law.
This surge of reforms oblong. Board management software , such as a high-quality board portal, can not be up-to-date on all reforms, but so to communicate in real-time in complete security with other directors and the chairman in discussions about them.
Diligent Governance Cloud: Board Management Software that supports corporate governance and compliance
The Governance Cloud , the only integrated enterprise governance management system, is an organization that seeks to achieve best-in-class governance, is an ecosystem of software tools. Stringent, the scope of governance evolves. The Governance Cloud allows boards to meet their demands in the boardroom and beyond.
Governance leaders, executives and board directors rely on the industry-leading diligent platform for the most secure and intuitive solution to material management and collaboration. Diligent Boards ™ is a board portalelectronically stores a board’s agendas, documents, annotations and discussions within a secure board portal. Corporate secretaries and board chairs can use the portal to book books in minutes. The portal has been designated virtual rooms for committee work. Administrators can use the portal to avoid unnecessary problems with confidentiality. The “Meetings Meetings” feature consolidates board directors’ contacts, calendars and the logistics of meetings. The program is a secure and intuitive solution for managing board materials and collaboration.
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