The Securities and Exchange Board of India (SEBI) has announced in press release 95/2008 several changes to the Listing Agreement. The following mandatory provisions have been added:
1. If the non-executive Chairman is a promoter or is related to promoters or persons occupying management positions at the board level or at one level below the board, at least one-half of the board of the company should consist of independent directors.
2. Disclosures of relationships between directors inter-se shall be made in specified documents/filings.
3. The gap between resignation / removal of an independent director and appointment of another independent director in his place shall not exceed 180 days.
4. The minimum age for independent directors shall be 21 years.
In addition, the following non-mandatory provision has been added:
The company shall ensure that the person who is being appointed as an independent director has the requisite qualifications and experience which would be of use to the company and which, in the opinion of the company, would enable him to contribute effectively to the company in his capacity as an independent director.
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