Even as the deadline for the SEBI rule on separation of chairman and managing director roles is fast approaching, nearly half the top 500 listed companies are lagging behind with respect to compliance, The Economic Times reported.
In May 2018, markets regulator Securities and Exchange Board of India (SEBI) came out with new rules in line with the recommendations of the Uday Kotak committee on corporate governance. The same will be effective starting April 1, 2020.
In an amendment to the 'listing obligations and disclosure requirement', the regulator called for separation of the posts of Chairman and Managing Director of listed companies. It said that the Chairperson of a company's board should be a non-executive director and should not be related to the MD/CEO.
Citing data from nseinfobase.com, the report pointed out that in about 213 of these companies, the chairman still has an executive role. It added that the chairman is also the MD/CEO in about 161 of these companies.
The report also highlighted that in 79 companies, the chairman is related to either the MD or CEO. This is the case in Bajaj Finserv, Bajaj Auto, Adani Port, Shree Cement, UPL and Lupin, the report added.
Earlier in November, SEBI chairman Ajay Tyagi said that the companies have been given ample time to ensure compliance with the new rules.
Another requirement mentioned in the SEBI circular is that the board of directors of the top 500 listed companies should have at least one independent woman director by April 1, 2020, and the deadline for the top 1000 listed firms to comply with the same is April 1, 2020.
However, as of April last year, 10 percent of the top 500 NSE-listed companies were not in compliance with SEBI's gender diversity initiative. As many as 51 companies were yet to appoint at least one independent woman director on their boards, and of these, five companies were a part of the top 100 listed companies on the NSE.