Securities and Exchange Board of India (SEBI) has extended the time for listed companies to split the position of chief executive officer (CEO) and managing director (MD) from April 1, 2020 to April 1, 2022.
- As part of the latest amendment to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, SEBI postponed the deadline for the separation of the MD and CEO roles for the top 500 companies from the earlier stipulated April 1, 2020 to April 1, 2022.
- The SEBI notification stated that with effect from April 1, 2022, the chairperson of any of the top 500 listed entities would be a non-executive director and not be related to the MD or CEO as per the definition of the term “relative” defined under the Companies Act, 2013.
- As many as 160 of the top 500 listed entities are yet to split the MD and the CEO posts, according to data from Prime Database.
- This assumes significance as some of the biggest names of India Inc. had sought a relief in terms of postponing the deadline to comply with the norm notified in May 2018.
- Industry had various concerns in implementation, including seeking a clear regulatory demarcation on the role and responsibility under the Companies Act, 2013 and SEBI’s Listing Regulations for chairman and managing director.
Source : The Hindu