FICCI welcomes acceptance of Kotak Committee recommendations, suggests staggered implementation

Mar 29, 2018

 

NEW DELHI, 29 March 2018: FICCI endorses SEBI's initiatives towards bringing Indian governance standards not only on par with the best in the world but also take a leadership position. "Stronger and Better corporate governance practices would attract more capital into the country. In alignment with this view, FICCI welcomes SEBI's decision to accept some of the recommendations of the Kotak Committee," said Mr. Rashesh Shah, President, FICCI, referring to SEBI Board's decision on the suggestions of the Kotak Committee on Corporate Governance yesterday.

 

However, FICCI had shared its concerns with SEBI regarding regulations becoming more onerous, restrictive and costly, especially for mid-cap companies, Mr. Shah further added. This was also the clear conclusion from the results of a survey conducted by FICCI amongst corporates titled Corporate Governance in India@2016: Where Do We Stand? on the implementation of new provisions under the Companies Act, 2013 and SEBI (LODR) Regulations. The survey results revealed that compliance was becoming too time-consuming and expensive for listed companies. In fact, many serving directors mentioned that boards were spending too much time on compliance matters, leaving too little time for business issues. A sentiment echoed by the Kotak Committee. The risk of over-regulation of listed companies may tilt the scale in favour of private capital, affecting the depth of our securities market. 

 

President, FICCI, suggested that staggered implementation of the accepted recommendations would promote ease of compliance and preclude disruption in the functioning of boards. And we should look towards doing away with some redundant compliance requirements and streamline these. "FICCI is grateful to SEBI for its consultative approach and for considering industry feedback on some of the recommendations," he said.