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.

*****

Disclaimer: This material and the information contained herein is intended to provide general information on a particular subject or subjects and is not an exhaustive treatment of such subject(s). The information is not intended to be relied upon as the sole basis for any decision which may affect you or your business. Before making any decision or taking any action that might affect your personal finances or business, you should consult a qualified professional adviser.Please verify these details before taking any decision. These conditions are prevalent as on the date of article.

Tags:

Author Bio

More Under SEBI

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Posts by Date

June 2021
M T W T F S S
 123456
78910111213
14151617181920
21222324252627
282930