Sebi issues guidance on board evaluation

Board evaluation is voluntary for companies under the new Companies Act, Sebi listing regulations

Market regulator Securities and Exchange Board of India (Sebi) on Thursday issued detailed guidance note for listed companies on board evaluation. Under this, companies have to evaluate the performance of the board as a whole, individual director and various committees of the board. 

Sebi in the note has explained in details the entire concept of board evaluation and the process to be followed. 

The reason for the guidance note is to create awareness of the concept of board evaluation in India is at a "nascent stage", Sebi said adding that a large number of listed entities don't have much clarity on the processes.

Board evaluation is voluntary for companies under the new Companies Act and the Sebi listing regulations.

In the note, Sebi has delved upon the role and responsibilities of stakeholders and independent directors.

"The purpose of the guidance note is to educate the listed entities and their board of directors about various aspects involved in the board evaluation process and improve their overall performance as well as corporate governance standards to benefit all stakeholders," Sebi said.