SEBI does away with requirement for Top 500 listed entities to ensure Chairperson of their board is a non-executive director and not related to the MD/CEO; also revises Schedule on Corporate Governance

Further to the trail mail, the Securities and Exchange Board of India by way of a recent amendment to the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 effective 22^nd March, 2022 has done away with the requirement for Top 500 listed entities to ensure Chairperson of their board is a non-executive director and not be related to the Managing Director or the Chief Executive Officer (as per the definition of the term “relative” defined under the Companies Act, 2013) by 1st April, 2022.

Further, Schedule II (Corporate Governance) also stands revised by inserting a new Clause D i.e. “Separate posts of Chairperson and the Managing Director or the Chief Executive Officer where, the listed entity may appoint separate persons to the post of the Chairperson and the Managing Director or the Chief Executive Officer, such that the Chairperson shall – (a) be a non-executive director; and (b) not be related to the Managing Director or the Chief Executive Officer as per the definition of the term “relative” defined under the Companies Act, 2013.”

Source: Securities and Exchange Board of India