![]() ![]() Tyagi said that listed corporates, which raise funds from the public, having a credible and robust corporate governance framework are "sacrosanct to ensure transparency, remove asymmetry of information and enhance investors' trust". "It is important to ensure that when listed entities disclose material information related to the impact of Covid-19, they should not resort to selective disclosures, keeping in mind the principles governing disclosures," he added. Sebi had issued an advisory last year, providing an illustrative list of information that should be disclosed relating to the impact of the Covid-19 crisis. Such disclosures should include the impact of Covid-19 on business, performance and financials, he added. With regard to disclosure by listed entities, Tyagi said companies' boards should ensure that adequate disclosures are provided timely to stakeholders and there is no asymmetry of information. The market regulator, which recently came out with a consultation paper on independent directors, said the paper tries to "strike a balance between the majority shareholders' right to the final decision and the minority shareholders' ability to influence the same". On independent directors, Sebi chief said it's the regulator's endeavour to bring in greater balance, transparency and quality in the selection of independent directors and functioning of corporate boards. In addition, Tyagi stressed on the need to have a fine balance between the role and responsibilities of controlling shareholders and minority shareholders, so that the latter do not misuse the power given to them for protection of their rights. In fact, the regulator has, over the period, taken a number of steps to improve the ease of compliance by promoters. He clarified that Sebi acknowledges the very important role played by the promoters and entrepreneurs in wealth creation. Tyagi noted that some articles have opined that there is a tendency to portray the promoters in a bad light and that there is too much focus on only one set of stakeholders - minority shareholders. The OECD, the international standard setter for corporate governance, also recommends that the two posts should be separated as a good governance practice. Germany and Netherlands have a two-tier board structure, separating the roles of board and the management. In the UK and Australia, the debate has tilted in favour of separating the two posts. Globally too, Sebi chief said that the needle seems to be moving more towards the separation of chairperson and MD/CEO roles. The norms were part of the series of recommendations given by the Sebi-appointed Kotak committee on corporate governance. Currently, many companies have merged the two posts as CMD (chairman-cum-managing director), leading to some overlapping of the board and management, which could lead to conflict of interest and consequently the regulator in May 2018, came out with its norms to split the post. ![]()
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