TagCorporate Governance

SEBI’s ‘Skin in the Game’ Directive – Investor Interest versus Employee Interest

[Aman Jha is a third-year student at National Law University, Delhi and Anurag Shah is a fourth-year student at School of Law, Christ University Bangalore] The Securities and Exchange Board of India (“SEBI”), through a circular dated April 28, 2021, has directed Asset Management Companies (“AMCs”) to compensate its key employees partly in the form of units of the mutual fund schemes managed by...

The Evolution of Risk Management Oversight by Indian Boards

[Afra Afsharipour is Senior Associate Dean for Academic Affairs & Professor of Law at UC Davis School of Law and Manali Paranjpe a Research Associate at The Conference Board, India] Across the globe, the focus on effective risk management has intensified over the past two decades as major corporations have experienced risk management failures due to excessive financial risk taking...

Climate Change – A Ticking Clock for Investors?

[Insaf Ahmad TK and Mathangi K are third-year undergraduate law students at Gujarat National Law University, India] The year 2019 witnessed the bankruptcy of Pacific Gas and Electric Corporation which the Wall Street Journal described as a “climate change bankruptcy”. The investors in Pacific Gas and Electric Corporation incurred losses worth millions of dollars due to a series of wildfires in...

Supreme Court on Directors’ Duties in the Tata/Mistry Case: A Critique

On 26 March 2021, the Supreme Court of India pronounced its much-awaited ruling in Tata Consultancy Services Limited v. Cyrus Investments Pvt. Ltd. The Court found that the allegations of oppression and prejudice raised by the Mistry group could not be sustained, and hence declined to grant any relief. It answered all the legal questions raised in favour of the Tata group. In a sense, this forces...

SEBI’s Consultation Paper Makes Minority-Shareholder Friendly Proposals on Independent Directors

The Securities and Exchange Board of India (“SEBI”) has released a consultation paper making minority-shareholder friendly proposals mainly relating to independent directors (“IDs”). The paper proposes a dual-approval process for appointment and removal of IDs, which includes a “majority of minority shareholders” approval. If this approval is not received, a...

SEBI Consults on Risk Management Committee

Risk management has acquired a crucial status in corporate governance. Its importance tends to get accentuated in the wake of crises. The concept came to the forefront after the global financial crisis more than a decade ago, and it became entrenched in specific sectors such as banking and financial services that were severely affected by the crisis. Even industrial accidents such as the BP oil...

Regulating Listed PSUs for Disclosures and Transparency

[Gaurav Pingle  is a practising company secretary] True, fair, adequate and timely disclosures form one of the basic tenets of governance in listed companies and are essential for maintaining the integrity of the securities market. Timely disclosures of material events are of significant importance. They also bring about transparency and enable the investors to take an informed investment or...

Analysing MCA’s Proposed Framework on Business Responsibility Reporting

[Yash More and Hitoishi Sarkar are III year students at Gujarat National Law University] On August 18, 2020, the Securities and Exchange Board of India (“SEBI”) released the Consultation Paper on the format for Business Responsibility and Sustainability Reporting in India.   Interestingly, on August 11, 2020, the Ministry of Corporate Affairs (“MCA”) had also released the Report of the Committee...

The Future of Virtual Meetings under the Companies Act

[Gaurav Pingle is a Practising Company Secretary and Renucka Vaiddya a Research Associate at Gaurav Pingle & Associates] The Companies Act, 2013 has, at the outset, provided for conducting board meetings through video conferencing. In Achintya Kumar Barua v Ranjit Barthkur [2018] 91 taxmann.com 123, the National Company Law Appellate Tribunal (NCLAT) held section 173(2) of the Act read with...

SEBI Tightens Reins over the Proxy Advisory Industry

Proxy advisory firms have acquired the status of an important corporate governance intermediary. This is not just globally, but also in India. They play a crucial role of providing voting advice to shareholders (particularly of the institutional variety). In India, the advent of the proxy advisory industry over the last year has invigorated the active participation of institutional shareholders...

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