Life Insurance Corporation of India (LIC), a leading insurance and investment corporation in India, has announced a significant update in its governance structure. As per the Life Insurance Corporation of India (Shareholders’ Director) Regulations, 2023, notified in the Gazette of India on December 1, 2023, LIC has outlined a new framework for the addition of a shareholder’s director to its board.
Duration: 4 years tenure
Eligibility for Extension: The appointed person can extend their tenure for an additional four years.
Election: The shareholder’s director will be elected through a general meeting of shareholders.
Trigger for Election: Election is initiated upon a request from not less than one thousand shareholders or one-tenth of the total number of shareholders, whichever is lower.
Limitation: The appointed shareholder’s director cannot hold a similar position in more than two companies simultaneously.
IPO Listing: LIC was among the most expensive and highly-anticipated IPOs listed last year.
Government Stake Dilution: The government raised ₹20,557 crore by diluting its 3.5 percent stake in the company.
This new regulation represents a strategic move by LIC to enhance its governance structure and involve its shareholders more directly in its decision-making process. The appointment of a shareholder’s director is aimed at aligning the interests of shareholders with the board’s decisions, thus ensuring a more holistic and inclusive approach to corporate governance. As LIC continues to be a key player in India’s financial landscape, this development marks a significant step towards greater transparency and shareholder engagement.
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