SEBI Norms & Kumar Mangalam Birla Committee (1999)

This was the "Magna Carta" of Indian Corporate Governance. SEBI appointed Mr. Kumar Mangalam Birla to draft the first formal code.

Key Recommendations (Accepted as Clause 49)

1. Board Composition

• Optimum Combination: The Board must have a mix of Executive and Non-Executive Directors.
• The 50% Rule: If the Chairman is Executive (e.g., Mukesh Ambani), 50% of the board must be Independent. If Chairman is Non-Executive, 33% must be Independent.

2. Audit Committee

• Mandatory: Every listed company must have a qualified Audit Committee.
• Composition: Minimum 3 members, majority independent. Chairperson MUST be independent.
• Role: Oversee financial reporting and interface with auditors.

3. Remuneration Committee

• To decide CEO pay. (Non-mandatory initially, now mandatory).

4. Shareholders' Rights

• Speedy transfer of shares.
• Full disclosure in Annual Reports (Management Discussion & Analysis - MD&A).

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