Summary: Under SEBI’s (LODR) Regulations, 2015, Regulation 17 outlines the requirements for the board composition of listed entities. A listed company’s board must have a balanced mix of executive and non-executive directors, with at least one woman director. Furthermore, at least 50% of the board should be non-executive directors. For the top 1000 listed companies, one of the non-executive directors must also be an independent woman director. When the chairperson is a non-executive director, at least one-third of the board must be independent. If the chairperson is executive, independent directors must make up at least 50% of the board. If the non-executive chairperson is a promoter or related to a promoter, at least 50% of the board should be independent directors. Specific rules apply for entities with Superior Voting Rights (SVRS), and the top 2000 listed entities must have a minimum of six directors. Additionally, listed companies cannot appoint non-executive directors over 75 years old without shareholder approval in the AGM. The regulation emphasizes independence, diversity, and age considerations in board composition.
According to Regulation 17 of SEBI (LODR) Regulations, 2015, the composition of board of directors of the listed entity shall be as follows:
a) Board of directors shall have an optimum combination of executive and non-executive directors with at least 1 woman director and not less than 50 % of the BOD shall comprise of non-executive directors.
b) Top 1000 listed entities shall have at least 1 independent woman director.
c) Where the chairperson of the board of directors is a non-executive director, at least 1/3rd of the BOD shall comprise of independent directors and where the listed entity has an executive chairperson, at least 50 % of the BOD shall comprise of independent directors.
* Provided that where the regular non-executive chairperson is a promoter of the listed entity or is related to any promoter or person occupying management positions at the level of board of directors or at one level below the board of directors, at least 50 % of the BOD of the listed entity shall consist of independent directors.
Explanation – For the purpose of this clause, the expression “related to any promoter” shall have the following meaning:
(i) If the promoter is a listed entity, its directors other than the independent directors, its employees or its nominees shall be deemed to be related to it;
(ii) If the promoter is an unlisted entity, its directors, its employees or its nominees shall be deemed to be related to it.
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- Where the listed company has outstanding Superior Voting Rights Equity Shares, at least 50 % of the board of directors shall comprise of independent directors.
- Top 2000 listed entities shall comprise of not less than six directors.
- Any listed entity can-not appoint the non-executive director who has age of more than 75 years without passing the SR in the AGM.
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