{"id":115661,"date":"2021-06-30T18:41:07","date_gmt":"2021-06-30T13:11:07","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=115661"},"modified":"2021-07-01T17:15:03","modified_gmt":"2021-07-01T11:45:03","slug":"sebi-tightens-norms-related-to-independent-directors","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/sebi-tightens-norms-related-to-independent-directors\/","title":{"rendered":"SEBI tightens norms related to independent directors"},"content":{"rendered":"\n<p><strong>Source: <\/strong><a href=\"https:\/\/timesofindia.indiatimes.com\/business\/india-business\/sebi-tightens-norms-related-to-independent-directors-listed-companies-to-disclose-their-resignation-letters\/articleshow\/83955871.cms\"><strong>TOI<\/strong><\/a><\/p>\n<p><strong>What is the News?<\/strong><\/p>\n<p>Securities Exchange Board of India (SEBI) has approved various amendments to rules governing the appointment, re-appointment, and removal of Independent Directors.<\/p>\n<h5><strong>Who are Independent Directors?<\/strong><\/h5>\n<ul>\n<li><strong>An independent Director <\/strong>is a director on a board of directors representing minority shareholders. He\/she does not have a pecuniary relationship with the company or related persons, except for sitting fees.<\/li>\n<li><strong>Their role <\/strong>is to take an unambiguously and independently stand to have a check and balance on the majority shareholders. It reduces exposure of the company to unwarranted risks.<\/li>\n<li><strong>As per the Companies Act, 2013 <\/strong>all listed public companies need to have at least one-third of the total Directors to be independent.<\/li>\n<\/ul>\n<h5><strong>Amendments approved by SEBI for Independent Directors:<\/strong><\/h5>\n<p><strong>Appointment of Independent Directors(IDs)<\/strong><\/p>\n<ul>\n<li><strong>The appointment<\/strong>, re-appointment, and removal of independent directors shall be through a special resolution. It will now require 75% votes in support instead of 51%. This will be applicable to all listed entities.<\/li>\n<li><strong>The nomination and remuneration committee(NRC)<\/strong> will be required to have two-third Independent Directors(IDs) instead of the existing requirement of a majority. NRC\u00a0selects candidates for appointment as independent directors<\/li>\n<li><strong>Further<\/strong>, the NRC will have to disclose and justify the skill-sets while selecting a candidate as an independent director.<\/li>\n<li><strong>The key managerial personnel and their relatives<\/strong> or employees of the promoter group will have to observe a three-year cooling-off period before they get appointed as an independent director.<\/li>\n<\/ul>\n<table style=\"width: 100%; border-collapse: collapse; background-color: #f7f2f2;\">\n<tbody>\n<tr>\n<td style=\"width: 100%;\"><strong>Also Read :-<a class=\"seoquake-params-link\" href=\"https:\/\/forumias.com\/blog\/corporate-governance-framework-in-india-analysis\/\" rel=\"8b26e0cb x_url\">Corporate governance Framework in India: Analysis<\/a><\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h5><strong>Resignation of Independent Directors:<\/strong><\/h5>\n<ul>\n<li><strong>In case an independent director resigns, <\/strong>the company must disclose the entire resignation letter along with a list of her\/his present directorships and membership in board committees.<\/li>\n<li><strong>Moreover, <\/strong>a cooling-off period of one year has been introduced for an independent director transitioning to a whole-time director in the same company or subsidiary company or any company belonging to the promoter group.<\/li>\n<\/ul>\n<p><strong>Audit Committee:<\/strong><\/p>\n<ul>\n<li><strong>At least 2\/3rd of the members <\/strong>of an audit committee should be independent directors.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Source: TOI What is the News? Securities Exchange Board of India (SEBI) has approved various amendments to rules governing the appointment, re-appointment, and removal of Independent Directors. Who are Independent Directors? An independent Director is a director on a board of directors representing minority shareholders. He\/she does not have a pecuniary relationship with the company&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/sebi-tightens-norms-related-to-independent-directors\/\">Continue reading <span class=\"screen-reader-text\">SEBI tightens norms related to independent directors<\/span><\/a><\/p>\n","protected":false},"author":10317,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1566,3127,9],"tags":[8303],"class_list":["post-115661","post","type-post","status-publish","format-standard","hentry","category-daily-factly-articles","category-economy","category-public","tag-securities-exchange-board-of-india","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704578821},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/115661","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10317"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=115661"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/115661\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=115661"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=115661"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=115661"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}