Clause 49 of the Listing Agreement is an Annexure that directs business to improve their corporate governance norms in line with international standards.

Relevance to investor:
Improved corporate governance and declaration practices. This also mandates a minimum threshold for businesses that investors are assured of.

Predecessor policies / frameworks:
SEBI (Issue Of Capital And Disclosure Requirements) Regulations, 2009

Objectives:
Codify new corporate governance norms

Institution behind the policy / framework:
Securities and Exchange Board of India (SEBI), GoI

Target users:

• By all entities seeking listing for the first time, at the time of listing
• By all companies which were required to comply with the requirement of the clause 49"

Components of the policy / framework:
Key Mandatory provisions are as follows-

• Composition of Board and its procedure – frequency of meeting, number of independent directors, code of conduct for Board of directors and senior management; Audit Committee, its composition and role.
• Provision relating to Subsidiary Companies
• Disclosure to Audit committee, Board and the Shareholders, CEO/CFO certification, Quarterly report on corporate governance, Annual compliance certificate

Key Non-mandatory provisions include the following:

• Constitution of Remuneration Committee
• Training of Board members
• Peer evaluation of Board members
• Whistle Blower policy

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