Around Two-Thirds Of Top 500 Firms Already Have Separate Chairman, Managing Director Posts: SEBI
The governance norm would be effective from April 1 next year.
Securities and Exchange Board of India Chairman Ajay Tyagi on Wednesday said that he believes around two-third of top 500 corporates are already in compliance with the requirement amid concerns raised in certain quarters over the splitting of chairman and managing director posts at listed companies.
As part of efforts to strengthen corporate governance framework, the watchdog has asked listed companies to split the post of chairman and managing director. The norm would be effective from April 1 next year.
The regulations were notified in May 2018 and the idea was to make people understand and plan for it.
Sufficient time has been given and extending will only mean that they [corporates] don’t want to do it. Leader or board [chairman] and that of management [CEO], if they are two different then perhaps there can be balance in powers and responsibilities, and decision making.Ajay Tyagi, SEBI Chairman
He also said the norms were deliberated at length and was then taken to SEBI board. "As the time is coming closer, they are speaking about this like father and son. It is for you to make a judgement on what all things are happening in corporate governance of various corporates, whether one should be one more cautious, whether corporate governance is as per norms or not," the SEBI chief said.
While acknowledging that the move might not solve all the corporate governance issues, Tyagi said that does not mean that "you will not try to solve it". "Out of top 500 companies, I believe two-third of companies are already meeting the requirements that you are saying," he noted.
In recent months, concerns have been expressed in certain quarters about the SEBI norms on splitting the two posts.