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Who has proposed that the listed entities should take approval from shareholders at least once in 5 years for the appointment of directors to serve on their boards?
A)
RBI
B)
SEBI
C)
IRDA
D)
PFRDA

Correct Answer :   SEBI


The SEBI has proposed that the listed entities should take approval from shareholders at least once in 5 years for the appointment of directors to serve on their boards.

Reason : To curb the practice of occupying permanent directorship in a company.

* SEBI also proposed norms, related to special rights granted to certain shareholders; sale, disposal, or lease of assets of a listed entity outside the ‘scheme of arrangement’ framework and on agreements binding listed entities.

* In the interest of good corporate governance at listed entities, all directors appointed to the board of a listed entity need to go through periodic shareholders’ approval process, thereby providing legitimacy to the director to continue to serve on the board.

* Sebi proposed in a consultation paper on strengthening corporate governance at listed entities by empowering shareholders.

* As on March 31, 2024, if there is any director serving on the board of a listed entity without his / her appointment or re-appointment being subject to shareholders’ approval during the last five years i.e., from April 1, 2019, the listed entity shall take shareholders’ approval in the first general meeting to be held after April 1, 2024, for his / her continuation on the board of the listed entity, the markets regulator said..

Source : Indian Express

Published On : February 22, 2023
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