The Securities and Exchange Board of India has stepped up its corporate governance push with a new circular that significantly expands the obligations of independent directors and restructures audit committee functioning for listed companies.
Key Changes
- Independent directors must now certify annually that they have not received any pecuniary benefit beyond sitting fees from the company or its group entities.
- Audit committees are required to conduct quarterly — not half-yearly — reviews of related party transactions exceeding certain thresholds.
- Whistleblower mechanisms must be independently accessible to independent directors.
Timeline
Large-cap companies (top 500 by market capitalisation) must comply within 90 days. All other listed entities have 180 days.