Ministry of Corporate Affairs

Posted On: 24 JUL 2018 6:00PM by PIB Delhi

The Securities and Exchange Board of India (SEBI), based on the recommendations of Kotak Committee on Corporate Governance, has amended the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 splitting the positions of the Chairperson and Managing Director, to start with, for top 500 listed companies on the basis of market capitalization effective from 01.04.2020.

The first proviso to section 203(1) of Companies Act, 2013 provides that an individual shall not be appointed/reappointed as the chairperson of a company as well as its MD/CEO at the same time unless the articles of such company provide otherwise or the company does not undertake multiple businesses.

The time-frame for implementation is to allow adequate transition time to companies to comply with the new requirement.

This was stated by Shri P.P. Chaudhary, Union Minister of State for Corporate Affairs in written reply to a question in Rajya Sabha today.

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DSM/RM/KMN

Split of Chairperson and Managing Director mandated for top listed companies under SEBI amendment with a transition period. SEBI amended the Listing Regulations, following Kotak Committee recommendations, to require separation of the roles of chairperson and managing director/CEO for the largest listed companies by market capitalization, with a transition period for implementation; the first proviso to section 203(1) of the Companies Act permits exceptions where company articles allow dual roles or the company does not undertake multiple businesses.