InvestorQ : Hi can you throw some light on the recent announcements made by SEBI on the enhancement of corporate governance and financial results?
diksha shah made post

Hi can you throw some light on the recent announcements made by SEBI on the enhancement of corporate governance and financial results?

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Dilmini Mercia answered.
4 weeks ago
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In its latest board meeting, the SEBI Board has proposed some major changes to enhance corporate governance standards in the Indian context. SEBI has now announced that the top 1000 companies listed on the stock exchanges, as measured by their market capitalizations, must have a formal dividend distribution policy. You would recollect that this provision already exists for the top 500 companies, which has now been extended to top 1000.

The whole idea of this exercise is bring about greater transparency and disclosure practices which would lead to better corporate governance practices overall. This is being extended from top 500 companies to the top 1000 companies, but many larger companies are already using the dividend policy announcement as a means to make a statement to their shareholders about the methodology of utilization of fund surpluses.

There have also been some interesting announcements on the corporate result announcements. Now, if board meetings extend beyond one day, the financial results for the quarter must be publicly announced within 30 minutes of the end of the board meeting on the very day when such results are considered by the board. This would ensure that there is transparency in results announcement and insider opportunities are reduced.

In the light of the recent Vedanta delisting issue, it has now been mandated by SEBI that promoters will be required to disclose their intention to delist by making an initial public announcement. So, sudden announcements are ruled out now. SEBI also cleared the proposal for constitution of a risk management committee or RMC, which will now be extended to the top-1,000 listed entities by market capitalisation instead of just 500.

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