New Delhi: To provide more clarity for stakeholders, Sebi on Thursday came out with a detailed guidance note for evaluation of boards of listed companies including the role of independent directors.
The guidance assumes significance against the backdrop of ongoing intense boardroom battle at Tata group. However, the regulator has not mentioned about any particular instance or company. The guidance note has been prepared to “guide listed entities by elaborating various aspects of board evaluation that may help them to improve the evaluation process, derive the best possible benefit and achieve the objective of the entire process”. Among others, Sebi has emphasised that the role and function of chairperson in board evaluation needs to be laid out clearly in advance in order to achieve maximum benefit of the process. Responsibilities of various persons, including independent directors, and committees for carrying out evaluation of respective boards as well as the relevant disclosure requirements under corporate governance obligations have also been touched upon in the note.
Observing that the concept of board evaluation in India is at a nascent stage, Sebi said it has been brought to the notice by market participants that the number of listed entities in the country is very large, many of them may not have much clarity on the process of board evaluation and hence may need guidance.
