India's top 500 companies have gotten more time to split the roles of chairperson and managing director. Market regulator SEBI had set a deadline of April 2020 for top companies to comply with this rule but it has extended this now by two years.
The rule was introduced after a committee led by Uday Kotak suggested a major overhaul to corporate governance. To discuss this CNBC-TV18 spoke to Venu Srinivasan Chairman of TVS Motor and Sunil Munjal chairman of Hero Enterprises.
Srinivasan said, "I think it is a very welcome decision. We have to look at the Indian environment where all families are heavily invested in the companies and our wealth depends on the share price of our companies and for that, we need good governance and good leadership."
He further added, "I would not like to have such a rule in our country at this point in time. Maybe 20-30 years later as companies become diluted and you have a professional chairman, a professional managing director, in such a case it might be necessary."
Munjal said, "India is made up primarily of family-owned businesses and this was a concern in many businesses. People had gone back to SEBI, to government, to other decision-makers to review this decision. I am glad that they have taken one step to at least defer it which is of course not a permanent solution."