On Monday, the Securities and Exchange Board of India (SEBI), the market regulator extended the deadline on its directive for companies to separate the roles of chairman and managing director to April 2022.
Earlier, SEBI mandated top 500 listed entities by market capitalisation to comply with the requirement of separating these roles by 1 April 2020 in view of demand from the corporates and to keep compliance cost lower amid a slowing economy.
The regulator informed of its decision to defer the date of implementation without specifying any reason.
The SEBI mandate also excludes family members and relatives from taking up the MD position.
As per Companies Act of 1956, relative includes spouse, father, mother (including stepmother), son (including step-son), son's wife, daughter (including step-daughter), father's father, father's mother, mother's mother, mother's father, son's son, son's son's wife, son's daughter, son's daughter's husband, daughter's husband, daughter's son, daughter's son's wife, daughter's daughter, daughter's daughter's husband, brother (including step-brother), brother's wife, sister (including step-sister) and sister's husband.