Mumbai, Apr 8 (UNI) The Securities and Exchanges Board of India (SEBI), in a modification to a clause in equity listing agreement of stock exchanges today, made it mandatory that Companies in which non executive Chairman is a promoter or related to promoters, atleast one half of the board of directors should consist of independent directors.
The same would also apply if the non executive chairman is related to persons occupying management positions at the Board level or at one level below the board, SEBI said in a circular issued to all stock exchanges today with regard to changes in clause 49 of the listing agreement.
It had also made it mandatory for companies to disclose relationships between directors inter-se through specified documents/filings.
SEBI said the changes were being given in effect to the interest of investors in securities and to promote the development of/and to regulate the securities market.
The gap between resignation/removal of an independent director and appointment of another independent director in his place should not exceed 180 days. However, this provision would not apply in case a company fulfils the minimum requirement of independent directors in its Board, i.e., one-third or one-half as the case may be, even without filling the vacancy created by such resignation/removal, the circular said.
The minimum age for independent directors should be 21 years.
Non-mandatory provisions mentioned in the circular included that a company should ensure that those persons being appointed as an independent director has the requisite qualifications and experience which would be of use to the company and which, in the opinion of the company, would enable him to contribute effectively to the company in his capacity as an independent director.
SEBI advised all stock exchanges to give effect to the changed policies by appropriately amending clause 49 of equity listing agreement in line, with the text of the amendments specified by it and also make consequential chanes, if any, in other cluases of such agreements.
All Stock Exchanges have been advised to communicate to SEBI, status of implementation of the requirements of this circular in the next Monthly Development Report.
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