Performance review of Public Interest Directors (PIDs)
Summary
This circular mandates Market Infrastructure Institutions to establish a performance review framework for Public Interest Directors. It outlines specific requirements for policy formulation, evaluation mechanisms involving internal and external assessments, and disclosure obligations. The document also clarifies tenure extensions, eligibility criteria, and implementation directives for compliance with SEBI regulations. This section provides a guide for Mutual Investment Institutions (MIIs) to frame criteria for the performance review of Principal Independent Directors (PIDs). It outlines specific qualifications, experience, and competencies required for PID roles. The text details functional expectations including attendance, integrity, independence, and adherence to regulatory norms.
Text
SEBI Board decided that the tenure of PIDs may be extended by another 3 years, subject to performance review in the manner specified by the Board.
Public interest directors shall be nominated for a term of three years, extendable by another term of three years, subject to performance review... maximum of three terms across recognized stock exchanges / recognized clearing corporations / depositories, subject to a maximum age limit of seventy five years.
The Nomination and Remuneration committee (NRC) of the MIIs will be responsible for framing the performance review policy for PIDs.
Such performance review policy shall include criteria for performance evaluation, methodology adopted for such evaluation and analyzing the results... scope for both internal evaluation as well as external evaluation.
NRC shall also be responsible for reviewing such performance review policy, at least once in 3 years.
Such performance review policy and changes made therein, shall be approved by the governing board of MII.
NRC shall be primarily responsible for formulation of performance evaluation criteria... taking into consideration guiding principles provided at Annexure A.
PIDs shall be subjected to internal evaluation as well as external evaluation, carrying equal weightage.
All the governing board members shall evaluate the performance of each PID, on an annual basis at the end of every financial year.
PIDs shall also be subject to external evaluation during their last year of the term in a MII, by a management or a human resources consulting firm... external consultant should not be a related party or associated with the MII...
Such performance review should be carried out in fair & objective manner and the review should be recorded with clarity and verifiable facts in a standardized format covering all the relevant criteria / aspects.
conflict of interest, if any, of any PIDs should be disclosed to SEBI by the governing board with their comments/ views.
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Source: SecMarx — Performance review of Public Interest Directors (PIDs). Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.