Governance Briefing — May 5, 2021
India’s Securities and Exchange Board adopted the Listing Obligations and Disclosure Requirements (Third Amendment) Regulations on May 5, 2021, expanding board risk oversight, quorum, and compliance officer duties for the top 1,000 listed entities.
Executive briefing: On 5 May 2021 the Securities and Exchange Board of India (SEBI) notified the SEBI (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulations, 2021. The amendments broaden risk management committee mandates, require at least one independent director at board meetings of the top 1,000 listed companies, and heighten compliance officer accountability for reporting governance lapses.
Key amendments
- Expanded risk management committees. Top 1,000 entities by market capitalisation must constitute risk committees with at least three members, including a majority of board directors and at least one independent director, meeting at least twice per year.
- Enhanced board quorum. Board meetings of the top 1,000 listed entities now require the presence of at least one independent director, formalising governance oversight.
- Compliance officer duties. Company secretaries must coordinate with the chief executive and board to address non-compliance, with immediate reporting obligations to exchanges.
Implications for boards
- Indian conglomerates. Boards should recalibrate committee charters, risk dashboards, and meeting cadences to demonstrate compliance with the amended regulations.
- Foreign listings. Multinationals with Indian depository receipts must reconcile global governance structures with SEBI’s quorum and risk expectations.
- Nonprofit-controlled entities. Trusts or public institutions listed on Indian exchanges must document risk oversight adaptations and compliance reporting chains.
Action checklist
- Update risk management committee charters to reflect membership, quorum, and reporting changes.
- Refresh board calendars to guarantee independent director participation and documentation.
- Enhance compliance officer procedures for identifying, escalating, and disclosing governance breaches.
Sources
Zeph Tech assists Indian and cross-listed issuers with committee charter redesign, compliance officer controls, and risk reporting aligned to SEBI’s amended LODR framework.