Sebi to announce new corporate governance norms

Business

oi-Staff

By Super

Published: Saturday, December 21, 2013, 9:24 [IST]

Mumbai: Markets regulator Sebi on Friday said it would soon come out with new corporate governance norms. "We have already placed documents for consultation. Our consultation is almost over and we are now going to promulgate our rules very soon," Sebi Chairman U K Sinha told reporters at a corporate governance summit organised by CII here.

"For listed companies, we will like to tell you, if we are going to do something over and above what is specially mentioned in the Companies Act, in the interest of corporate governance of the large corporates, it would be after consideration with all of you (stakeholders)," he added.

As several companies have operations outside India and many more would be venturing in foreign territories, there is a need to align rules with the best in the world, Sinha said.

"We don't only have the problems of foreign guidelines and standards, we also have to deal with extra-territoriality of foreign laws...We have to cope with them," he said.

The SEBI chief pointed out that of the listed companies, more than 1,100 are non-compliant of clause 40A of the Listing Agreement and over 900 firms don't follow clause 49. "I hope you all will agree if enforcement action is taken, we will be doing the correct thing," he added.

Clause 40A deals with minimum level of public shareholding, while clause 49 deals with corporate governance, with focus on the constitution of board and top management.

"My request to all of you (corporates) is to help Sebi to ensure that we reach a level that is much higher and which is in keeping with the best in the world," he said.

Sinha also asked companies to show real commitment towards corporate social responsibility. Talking about increase in number of proxy advisory firms, Sinha said SEBI is watching the trend.

In the last few years, there has been rise of a very structured, spontaneous, highly visibly and agitated movement on various issues such as social and political, Sinha said, adding that participants of such movements are no longer the traditional workforce of political parties.

"Corporations cannot ignore this movement. When larger society is facing this, it is natural that the same guiding principles will be affecting us (corporations) as well," he said.

PTI