The Securities and Exchange Board of India (SEBI) may relax the deadline for publicly-listed companies to separate the post of chairman and managing director (MD) by a year.
The deadline to split the post is March 31, 2020. The market regulator is in talks with the Finance Ministry and the Prime Minister's Office (PMO) regarding this matter.
The possible extension could be due to large-scale objection by the corporates, many of which had raised the issue with Prime Minister Narendra Modi at a meeting recently, sources told Moneycontrol.
A SEBI panel headed by eminent banker Uday Kotak had first suggested a major overhaul of corporate governance norms for listed companies.
The proposal to split the post of chairman and MD was first mooted by his panel. The committee had suggested that only the non-executive director be allowed to be made chairman, which would eventually lead to a split in the posts of chairman and MD.
Experts told the news website that the separation of the posts will help segregate roles between the chairman (of the board) who takes care of the overall strategy, and MD, who is responsible for the day-to-day functioning of the management.
SEBI suggested splitting the posts of chairman and MD in an amendment to the 'listing obligations and disclosure requirements' in line with the Uday Kotak committee's proposal.
Meanwhile, around half of the top 500 publicly-listed companies are yet to conform to SEBI's decision announced in May 2018.