SEBI issues Consultation paper on “Review of Regulatory Provisions related to Independent Directors”

Last updated: 02 March 2021

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The Securities and Exchange Board of India (SEBI) has released a consultation paper to review and strengthen the regulations surrounding Independent Directors (IDs). This initiative aims to enhance the effectiveness of IDs in corporate governance and protect minority shareholder interests. SEBI is inviting public feedback on various proposals, including changes to eligibility, appointment, re-appointment, removal processes, and committee compositions.

Securities and Exchange Board of India

SEBI issues Consultation paper on “Review of Regulatory Provisions related to Independent Directors”

PR No. 10/2021

SEBI has over the years, strengthened the institution of independent directors (IDs) through the recommendations of various committees as also through stakeholder consultations. However, concerns around the efficacy of independent directors as a part of corporate governance framework continue. There is therefore a need to further strengthen the independence of IDs and enhance their effectiveness in the protection of interests of minority shareholders and performing other functions.

In this context, a Consultation Paper on “Review of Regulatory Provisions related to Independent Directors” has been issued by SEBI today for public comments. The Consultation Paper seeks views of the public on proposals including broadening the eligibility criteria for IDs, process of appointment / re-appointment and removal of IDs, enhancing transparency in the nomination and resignation of IDs, strengthening the composition of Board Committees, etc. Additionally, views are sought on the need for review of remuneration of IDs.

The Consultation Paper is open for public comments till April 01, 2021 and can be accessed on the SEBI website www.sebi.gov.in under the link Reports & Statistics -> Reports -> Reports for Public Comments.

Mumbai
March 1, 2021

FAQ :

The consultation paper aims to review and strengthen the regulatory provisions for Independent Directors to enhance their independence and effectiveness in corporate governance.

The paper covers proposals on broadening eligibility criteria, the process of appointment/re-appointment and removal, transparency in nomination and resignation, and strengthening Board Committee compositions.

Yes, SEBI is seeking views on the need for a review of the remuneration of Independent Directors.

Public comments can be submitted until April 01, 2021, via the SEBI website (www.sebi.gov.in) under the link Reports & Statistics -> Reports -> Reports for Public Comments.

Notification No : PR No. 10/2021
Source : https://www.sebi.gov.in/media/press-releases/mar-2021/sebi-issues-consultation-paper-on-review-of-regulatory-provisions-related-to-independent-directors-_49337.html

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