• A corporate governance committee headed by Uday Kotak has submitted its report on corporate governance.

Main highlights of the committee:
Minimum number of board of directors:

• The Committee has proposed that now board of directors shall comprise not less than six directors.
• Also board of directors shall have an optimum combination of executive and non-executive directors with at least one woman as an independent director and not less than 50% of the board of directors shall comprise of non-executive directors.

Minimum number of board meetings

• These board shall meet at least 4-5 times a year, with a maximum time gap of one hundred and twenty days between any two meetings and at least once a year.
• Under this meeting, the board shall specifically discuss strategy, budgets, boardevaluation, risk management,ESG (environment, sustainability and governance) and succession planning.
• Listed entity shall, at least once every year, undertake a formal interaction between the non-executive directors and the senior management
• With effect from April 1, 2018, if a director does not attend at least half of the total number of board meetings heldover the Relevant Period, his/her continuance on the boardshall be subject to ratification by the shareholders at the next annual general meeting.
• While from April 01, 2020, listed entities which have public shareholding 40% or more shall ensure that the Chairperson of the board shall be a non executive director, on and from that financial year.
• No listed entity shall appoint a person or continue the directorship of any person as a non-executive director who has attained the age of 75 years unless a special resolution is passed to that effect.

Minimum compensation and remuneration

• Top 500 listed entities by market capitalisation shall pay compensation to each independent director as Rs 5 lakh per annum, whether through sitting fees or profit linked commissions.
• Provided that, this provision will not apply in case of inadequacy of profits in accordance with Section 197 of Companies Act, 2013 - minimum sitting fees for every board meeting of Rs 50,000 for top 100 entities by market capitalisation and Rs 25,000 for next 400 entities.
• Sebi stated that annual remuneration payable to such executive director if exceeds Rs 5 crore or 2.5% of the net profits of the listed entity, whichever is higher, the approval of the shareholders under this provision shall be valid only till expiry of term of such director.
• Approval of shareholders shall be obtained every year in which the annual remuneration payable to a single non-executive director exceeds 50% of the total annual remuneration payable to all non-executive directors, giving details of the remuneration thereof.