• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Port Info

• Ships in Ports
  
  

Archives

• Yesterday
• Datewise
• Resources

Group Sites

• The Hindu
• Business Line
• The Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Richa Mishra
K.R. Srivats

Mr Ashok Lahiri (left), Chief Economic Advisor, Ministry of Finance, with Mr D. Swarup, Expenditure Secretary, coming from the SEBI board meeting in the Capital on Tuesday. - Ramesh Sharma

New Delhi , Jan. 25

COMPOSITION of corporate boards continues to be a vexed issue for both the Company Affairs Ministry and the capital market regulator.

The Government is understood to have used Tuesday's meeting of the Securities & Exchange Board of India (SEBI) board to raise a number of issues on the proposed revision to Clause 49 of the Listing Agreement.

Some of the proposed changes to Clause 49 are not in conformity with the existing Company Law, official sources said. SEBI has already held that the revised Clause 49 of the Listing Agreement would be implemented from April 1 this year. A key issue that is understood to have come up for discussion at the meeting is the extent of representation that should be granted to independent directors on a company's board.

It was pointed out that the existing Companies Act does not have a comprehensive definition of an independent director, sources said. Further, the Companies Act does not stipulate that corporate board should have 50 per cent representation from independent directors.

Sources pointed out that the concept paper for revamped company law does propose representation of independent directors in corporate boards. "SEBI should wait for the enactment of the new company law before implementing the revision to Clause 49 of the Listing Agreement," official sources said.

The proposed changes in Clause 49 envisage at least 50 per cent representation of independent directors in corporate boards. Ministry officials pointed out that the Listing Agreement though binding on the companies has lesser legal sanctity than Companies Act.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Fire at Chennai Petro Manali oil storage tank

Copyright © 2005, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line