In order to improve and strengthen the Corporate Governance structure of a Company, SEBI has mandated formation of few committees of the Board. These are Audit Committee, Nomination and Remuneration Committee, Stakeholder Relationship Committee and Risk Management Committee under Regulation 18, 19, 20 and 21 respectively of the SEBI (LODR) Regulations, 2015. SEBI has also specified the provisions relating to the composition, meetings, quorum etc. of each committee along with their roles and responsibilities. However, Companies listed on the SME Exchange are exempted from the compliance from the provisions of the above regulations. A comparative study of these committees is presented below:
| Particulars | Audit Committee
(Reg. 18 of SEBI LODR) |
Nomination & Remuneration Committee
(Reg. 19 of SEBI LODR) |
Stakeholder Relation-ship Committee
(Reg. 20 of SEBI LODR) |
Risk Management Committee (applicable to top 1000 listed entities determined on the basis of market capitalisation, as at the end of the immediate previous financial year) (Reg. 21 of SEBI LODR) |
| Composition | 1. Minimum 3 directors as members.
2. 2/3rd of the members of audit committee shall be independent directors. 3. in case of a listed entity having outstanding SR equity shares, the audit committee shall only comprise of independent directors. 4. All members of audit committee shall be financially literate and at least 1 member shall have accounting or related financial management expertise. |
1. Minimum three directors as members.
2. All directors of the committee shall be non-executive directors. 3. At least fifty percent of the directors shall be independent directors. 4. in case of a listed entity having outstanding SR equity shares, two thirds of the nomination and remuneration committee shall comprise of independent directors. |
1. At least 3 directors, with at least 1 being an independent director, shall be members of the Committee.
2. In case of a listed entity having outstanding SR equity shares, at least 2/3rdof the Stakeholders Relationship Committee shall comprise of independent directors. |
1. Minimum three members with majority of them being members of the board of directors, including at least one independent director.
2. In case of a listed entity having outstanding SR equity shares, at least 2/3rdof the Risk Management Committee shall comprise of independent directors. 3. Senior executives of the listed entity may be members of the committee. |
| Chairperson | Chairperson of the audit committee shall be an independent director and he/she shall be present at annual general meeting to answer shareholder queries. | Chairperson of the NRC shall be an independent director.
Provided that the chairperson of the listed entity, whether executive or non-executive, may be appointed as a member of the NRC but shall not chair such Committee. The Chairperson of the NRC may be present at the annual general meeting, to answer the shareholders’ queries; however, it shall be up to the chairperson to decide who shall answer the queries. |
Chairperson of this committee shall be a non-executive director and shall be present at the annual general meetings to answer queries of the security holders. | Chairperson of the Risk management committee shall be a member of the board of directors. |
| Secretary to the Committee | Company Secretary shall act as the secretary to the audit committee.
|
No such requirement. | No such requirement. | No such requirement. |
| Meetings | At least four times in a year and not more than 120 days shall elapse between two meetings.
|
The nomination and remuneration committee shall meet at least once in a year. | The Stakeholders Relationship Committee shall meet at least once in a year. | The risk management committee shall meet at least twice in a year in such a manner that not more than 180 days shall elapse between any two consecutive meetings. |
| Quorum | Either 2 members or 1/3rd of the members of the audit committee, whichever is greater with at least 2 independent directors in attendance. | Either 2 members or 1/3rd of the members of the committee, whichever is greater, including at least one independent director in attendance. | Not specified. | Either 2 members or 1/3rd of the members of the committee, whichever is higher, including at least one member of the board of directors in attendance. |
| Roles & Responsibilities | The role of the Audit Committee and the information to be reviewed by the audit committee shall be as specified in Part C of Schedule II of SEBI (LODR) Regulations, 2015. | The role of the Nomination and Remuneration Committee shall be as specified as in Part D of the Schedule II of SEBI (LODR) Regulations, 2015. | The role of the Stakeholders Relationship Committee shall be as specified as in Part D of the Schedule II of SEBI (LODR) Regulations, 2015. | The board of directors shall define the role and responsibility of the Risk Management Committee and may delegate monitoring and reviewing of the risk management plan to the committee and such other functions as it may deem fit[such function shall specifically cover cyber security]
Provided that the role and responsibilities of the Risk Management Committee shall mandatorily include the performance of functions specified in Part D of Schedule II. |
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