Mumbai: In an effort to provide more strength to shareholders who do not promote in a company, market regulators Sebi said on Tuesday that two-thirds of members of the Nomination & Remuneration Committee (NRC) and the Council Audit Committee (AC) of the company Registered must be an independent director.
At present, the rule says that the majority of members of the two important committees of this council must be an independent director.
In the council meeting on Tuesday, Sebi also said that the appointment of an independent director must be approved by shareholders within three months or through the GMS, which one earlier.
Appointment must go through special resolution, which will require a nod at least 75% of shareholders.
Sebi further said that if an independent director resigned from the council, the company must reveal to the exchange of content full of resignation letters.
It is said that all related party transactions must be removed only by independent directors on the Audit Committee.
According to Sebi, between other qualifications, an independent director is a person who is not a promoter or promoter of the company, holding, a subsidiary, or association company.
The person must also be eligible to add value to the company.
The person, in addition to receiving the Remuneration of Directors, should not have other money relationships with the company for two financial years which immediately overtook.
Sebi also introduced a one-year cooling period for independent directors to director all the time in the same company, holding, subsidiaries, company associates or group companies.
It is also said that if the main managerial personnel, their relatives, or employees of the promoter group company want to be an independent director, there must be a three-year cooling period.
Sebi release notes that the Board has agreed to make references to the Corporate Affairs Ministry to “provide greater flexibility to the company while deciding remuneration for all directors (including independent directors), which can include commissions related to profit, sitting costs, ESOPs, etc.
The determined overall boundary is determined based on the Company’s law, 2013 “.
This change in the rules will take effect from January 1, 2022.
Sebi has also tried to make the appointment of an independent director more transparent.
It was said that NRC, when appointed an independent director, had to make an increase in disclosure that must include the skills needed for the appointment as an independent director and determined how the candidate was proposed according to the expertise.
According to Anand Lakra, a partner at the company’s law firm J Sagar Associates, by increasing the voting threshold for the appointment of independent directors from 51% to 75%, public shareholders will play an important role in the company with low promoter bets.
However, “a friendly approach to shareholders who are more common is to introduce the need to find the majority of public shareholders to the appointment of independent directors articulated in discussion papers”, said Lakra.