Amendments to Clause 49 of the Listing Agreement
Summary
This circular mandates amendments to Clause 49 of the Listing Agreement based on the Kumar Mangalam Birla Committee recommendations. It specifies that institutional directors should be treated as independent directors for government companies and defines committee service limits for directors. Stock Exchanges are instructed to implement these changes immediately and notify SEBI.
Text
Except in the case of government companies, institutional directors on the boards of companies should be considered as independent directors whether the institution is an investing institution or a lending institution.
For the purpose of considering the limit of the committees on which a director can serve, all public limited companies, whether listed or not, shall be included and all other companies (i e private limited companies, foreign companies and companies of Section 25 of the Companies Act, etc) shall be excluded. Further only the three committees viz. the Audit Committee, the Shareholders’ Grievance Committee and the Remuneration Committee shall be considered for this purpose.
The Stock Exchanges are advised to amend the listing agreement of the exchange immediately and intimate the same to SEBI.
Source: SecMarx — Amendments to Clause 49 of the Listing Agreement. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.