Why India Inc boardrooms will never be the same again

Here’s a look at how the new corporate governance norms will affect India Inc boardrooms.

The Securities and Exchange Board of India has accepted most of the recommendations proposed by the Kotak Committee on corporate governance.

These are around structuring of boards, additional audits and enhanced disclosures and obligations.

Here’s a look at how the new norms will affect India Inc boardrooms:

Proposal: Maximum number of directorships at listed firms reduced from 10 to 8 and further to 7

Deadline: From 10 to 8 by April 1, 2019, and to 7 by April 1, 2020

Current status: Only one individual holds 10 director positions; one holds nine and one holds eight

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Proposal: Minimum 6 directors on board

Deadline: April 1, 2019 for top 1,000 companies (by m-cap); April 1, 2020 for top 2,000 companies

Current status: 65 of the top 1,000 firms have less than 6 board members

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Proposal: To have at least 1 woman independent director

Deadline: April 1, 2019 for top 500 companies; April 1, 2020 for top 1,000 companies

Current status: 155 of the top 500 and 336 of the 1,000 companies don’t have any women independent director

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Proposal: Separation of CEO and chairperson position

Deadline: Initially, applicable to only top 500 listed firms from April 1, 2020

Current status: 165 of the top 500 companies have same person as CEO and chairperson. Some of these include Reliance Industries (Mukesh Ambani), Wipro (Azim Premji), Adani Ports and SEZ (Gautam Adani)           

-- Information source: Prime Database