Mandatory Women Directors In Listed Companies in India

 

The Securities and Exchange Board of India(SEBI) vide its circular dated 17th April, 2014 made it mandatory for all the listed companies to appoint at least one Woman Director on their Board of Directors by 31st March, 2015 in alignment with the requirement of Section 149 of the Companies Act, 2013, under corporate governance norms.

In furtherance to above, SEBI on 08.04.15 issued a Circular bearing reference no. CIR/CFD/CMD/1/2015 and subject as "Fine structure for non-compliance with the requirement of Clause 49(II)(A)(1) of Listing Agreement" to all Managing Directors/Executive Directors and all recognized Stock Exchanges.

SEBI's circular directs that all companies which have not yet complied with the norm but manage to do so by June 2015 will be levied a fine of INR 50,000. Further, companies, which comply with this requirement between July and September 2015, will be charged INR 50,000 and an additional fine of INR 1,000 per day till the date of compliance. Moreover, companies complying with the norms on or after October 1, 2015 will have to pay INR 1,42,000 along with an additional charge of INR 5,000 per day till the date of compliance.

• CA 2013 introduces significant changes to the composition of the boards of directors.

• Every company is required to appoint 1 (one) resident director on its board.
• Nominee directors shall no longer be treated as independent directors.
• Listed companies and specified classes of public companies are required to appoint independent directors and women directors on their boards.
• CA 2013 for the first time codifies the duties of directors.
• SEBI amends the Listing Agreement (with prospective effect from October 01, 2014) to align it with CA 2013.