Introduction:
In a extremely proactive step to further improving the corporate governance framework in India, the Securities and Exchange Board of India (‘SEBI’) formed a committee on Corporate Governance (‘Committee) in June 2017 under the chairmanship of none other than Mr. Uday Kotak with a view to provide recommendations for enhancing the standards of Corporate Governance of listed companies in India. The Committee consisted of officials from the government, industry, professional bodies, stock exchanges, academicians, lawyers, proxy advisors, etc.
The terms of reference of the committee were to make recommendations to SEBI on the following issues which inter-alia includes:
The Committee’s approach to the recommendations has been driven by the primary objective of enhancing corporate governance for listed entities. In this regard, the Committee believes that there are certain recommendations which may require implementation by authorities/ regulators in addition to SEBI. Therefore, the Committee has suggested that SEBI take up such recommendations with the relevant authorities/ regulators.
The Committee had received the observations/comments/objections/suggestions on the recommendations from Ministry of Corporate Affairs (MCA) and Ministry of Finance (MoF) on October 3, 2017 i.e. before submission of recommendations to SEBI. A significant number of recommendations by the Committee conflict with the provisions of the Companies Act, 2013 and face dissent from MCA (say 12 dissents out of 24 recommendations on the Board of Directors alone) and other regulatory bodies such as the Institute of Chartered Accountants of India (ICAI).
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