SEBI, vide its board meeting dated 15 February 2022, has decided to relax the requirement for mandatory separation of role of chairperson and Managing Director (“MD”) / Chief Executive Officer (“CEO”) for the top 500 (five hundred) listed companies, determined by the market capitalisation.
Earlier, in March 2018, SEBI acting on the recommendations of Kotak committee, had mandated the separation of roles of chairperson and MD / CEO of listed companies and in the light of this decision, an amendment was made to the Securities and Exchange Board of India (“Listing Obligations and Disclosure Requirements”) Regulations, 2015. The deadline for
compliance with this mandate was extended till 1 April 2022. However, as of December 2021, only 54% (fifty four percent) of the top 500 (five hundred) listed companies had complied with the mandate.
In light of the dismal level of compliance achieved, and continued representations from industry bodies and corporates expressing reasons and challenges for not being able to comply with this mandate, SEBI has decided to permit listed entities to comply with this requirement on a “voluntary basis”.
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