SEBI Saves The Day For Companies Through Fresh Norms
SEBI Saves The Day For Companies Through Fresh Norms
SEBI has recently created plenty of cheer for the corporate sector. It has relaxed governance norms and increased the deadline for the minimum of at least 1 lady director on the boards of listed firms and companies to April 1 next year. Companies can avoid hassles now thanks to the new norms.
For the simplification of the procedure for better corporate governance norms through listed firms, the market regulator has relaxed many of the key provisions of this law, in special reference to smaller companies. Stretching the deadline for appointment of women directors has also served to lighten the burden.
While amendments have been made for many provisions of the Corporate Governance Code for its eventual alignment with important sections of the new Companies Act (2013), the deadline will remain October 1, 2014 for all of these with the exception of the provision for a minimum of one woman director on the boards of companies which are listed. The listed companies will be able to work towards this till 2015 now.
SEBI has eased the process of implementation of stronger corporate governance norms. Hopefully, companies will still pursue the norms with dedication and sincerity characteristic of their projects and endeavours in the commercial and CSR sector so far. Appointment of the woman director on the board will seek to reduce gender disparity in the corporate sector and empower women.
Listed companies function in a certain manner and it is through these means that they are regulated as well. But many companies were not satisfied with the new regulatory regime and they have sent representations to SEBI, according to media reports. Consequently, SEBI has tweaked the new regulatory regime.
SEBI has also exempted smaller companies from mandatory compliance with the new Code at present. Smaller companies as defined by SEBI for this concession are those having equity share capital of around Rs. 10 crore and net worth not higher than Rs. 25 crore.
As per the changes, SEBI has been quoted by the media as having issued a statement regarding the modifications and saying, “received representations from market participants including companies and industry associations, highlighting certain practical difficulties in ensuring compliance, seeking clarifications on interpretation of certain provisions and suggesting various options to ease the process of implementation."
The Securities and Exchange Board had announced an overhaul of corporate governance norms for listed companies to give transparency to transactions and empower minority shareholders in April. The rules were to take effect from October 1. With many modifications, the changes to the modifications now come about. The bigger picture is shareholder activism has a long way to go in India as of now.
