Legal UpdatesSecurity Laws

SEBI splits Chairperson & Managing Directors position in listed companies

SEBI Updates

Based on Kotak Committee on Corporate Governance, SEBI has decided to split positions of the Chairperson and Managing Director on the basis of market capitalization by amending SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 . This will be applicable for top 500 listed companies and the respective amendment would be effective from April 01, 2020.

MCA highlights that first proviso to section 203(1) of Companies Act, 2013 highlights that an individual cannot be appointed/ reappointed as the chairperson of a company as well as its MD/CEO at the same time unless the articles of such company provide otherwise or the company does not undertake multiple businesses.

MCA further clarifies that the specific time frame has been given to allow companies to comply with the new requirement.

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