Mumbai, Oct 5: Securities market regulator Sebi on Thursday said that a committe formed by it to look into corporate governance has recommended a minimum of six directors on the board of listed firms.
The recommendation was made by a committee formed by Sebi on corporate governance in June 2017 under the Chairmanship of Uday Kotak, Executive Vice Chairman and Managing Director, Kotak Mahindra Bank.
The committee was constituted with a view to enhance the standards of corporate governance of listed entities in India.
The committee consisted of government officials and representatives from industry, professional bodies, stock exchanges, apart from academicians, lawyers and proxy advisors.
At present, the Companies Act, 2013 require a minimum of three directors on the board of a public limited company.
“The board of directors plays an important role in a company’s governance and performance… it is crucial that a sufficient number of directors with diverse backgrounds and skill sets are available on the boards of listed entities to fulfill these functions and obligations,” the committee’s recommendation report said.
“Therefore, the committee recommends that for any listed entity, a minimum of six directors should be required on the board of directors.”