SEBI Provides Big Relief to Listed Companies

SEBI Provides Big Relief to Listed Companies Separating the positions of Chairman and Managing Director (MD) in publicly traded corporations is optional; it is not required. SEBI, the market regulator, stated this on Tuesday. Let us remind you that the rule requiring the separation of the chairman and the CEO was set to take effect on April 1, 2022. Only 54% of the top 500 corporations had obeyed this regulation up until now. The purpose of this guideline is to promote corporate governance. According to the news, the chairmanship was to be retained non-executive in accordance with the norms. At the same time, it was decided that the chairman and managing director could not be related. Not only that, but the execution of these guidelines was met with hostility in Corporate India. Companies will now be able to keep the positions of Chairman and MD separately or jointly, depending on their wishes, thanks to a recent SEBI announcement.

CMD post in many companies

Many firms have combined the two posts as CMDs (Chairman-cum-Managing Director), resulting in some board and management overlap. This could cause a conflict of interest. As a result, in May 2018, the regulator devised criteria for separating this position.

Finance Minister Nirmala Sitharaman gave a response

Following the Board of Directors meeting, the Securities and Exchange Board of India (SEBI) issued a statement clarifying the situation for both positions. Finance Minister Nirmala Sitharaman stated earlier this month that the market regulator should investigate if Indian corporations had any opinions on the topic. She made it plain, however, that she is not providing any orders.