SEBI notifies stricter norms for appointment of managing director at listed companies
The Hindu
As per the Companies Act, 2013, the board cannot appoint a person who fails to get elected as a director at a general meeting as an additional director.
Putting in place stringent norms, SEBI has said that a person rejected by shareholders at a general meeting can be appointed or re-appointed as a managing director or whole time director or manager, only after providing detailed justifications and ensuring compliance with various conditions.
"The appointment or a re-appointment of a person, including as a Managing Director (MD) or a Whole Time Director (WTD) or a Manager, who was earlier rejected by the shareholders at a general meeting, shall be done only with the prior approval of the shareholders," SEBI said in a notification on Monday For considering the appointment or re-appointment of such a person earlier rejected by the shareholders, there should be a detailed explanation and justification by the company's nomination and remuneration committee and the board of directors for recommending the person.
As per the Companies Act, 2013, the board cannot appoint a person who fails to get elected as a director at a general meeting as an additional director.
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