The Hindu Business Line : SEBI modifies Clause 49 of listing agreement

Mumbai, April 8 SEBI on Wednesday made some modifications to the Clause 49 of the Listing Agreement. SEBI has stated that at least half of the board of directors of a listed company should consist of independent directors if the non-executive chairman of the company is related to the promoters or persons occupying management position.

Independent directors

As per the existing provision of the Clause 49 of the Listing Agreement, at least one-third of the board members are required to be independent directors.

In a circular issued today, amending this mandatory provision, SEBI said: “if the non-executive Chairman is a promoter or is related to promoters or persons occupying management positions at the board level or at one level below the board, at least one-half of the board of the company should consist of independent directors.” SEBI has also made the minimum age for independent directors as 21 years.

“The gap between resignation or removal of an independent director and appointment of another independent director in his place shall nor exceed 180 days,” according to another modification introduced by SEBI.

Requisite qualifications

Further, the regulator said that disclosures of relationships between directors should be made in specified document to the stock exchanges.

The regulator also directed the companies to ensure requisite qualifications and experience for the independent director to enable him to contribute effectively to the company in his capacity as independent director, though it was non-mandatory.

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