Securities and Exchange Board of India (Sebi) board has decided to make provision for separation of the roles of chairperson and MD/CEO as ‘voluntary’ against ‘mandatory’ earlier. The market regulator had in June 2017 set up a committee on corporate governance under Uday Kotak with a view to seek recommendations to further enhance corporate governance norms for listed companies.
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One of the recommendations that the Committee came out with was the separation of the roles of chairperson and MD/CEO of listed companies. This was proposed to provide a better and more balanced governance structure by enabling more effective and objective supervision of the management. The Sebi board, in its meeting in March 2018 approved the proposal for the top 500-listed entities. Later the deadline for compliance was extended by two years in January 2020.
Important takeaways for all competitive exams:
- SEBI Founded: 12 April 1992;
- SEBI Headquarters: Mumbai;
- SEBI Chairperson: Ajay Tyagi.