As many as 277 independent directorship positions have fallen vacant in NSE-listed firms since February, when Sebi decided to restrict the number of companies such directors can serve.
Further, six independent directorship positions need to be vacated in NSE-listed companies to comply with Sebi norms. These position are currently occupied by 5 persons, as per the latest report by indianboards.Com.
Under the market regulator's corporate governance norms, a person can serve as an independent director on boards of a maximum seven listed companies.
Besides, if an individual is a whole-time director in a listed firm, he can serve as an independent director in a maximum of three companies.
According to indianboards.Com, a joint initiative of Prime Database and NSE, the Sebi norms have resulted in as many as 277 independent directorship positions being vacated at the companies listed on the exchange since February, when the capital markets regulator first made this announcement.
The report further noted that a more worrying aspect was the present state of compliance with Clause 49 of the Listing Agreement regarding composition of the board.
"As many as 15 per cent of the NSE-listed companies (213 companies) are presently non-compliant (with this rule)," Prime Database Managing Director Pranav Haldea said.
"This number has gone up after Sebi's new norm of not treating nominee directors as independent, which was made effective October 1, 2014," he added.
With regard to tenure of independent directors, as many as 1,297 of a total of 5,999 independent directorship positions (22 per cent) in as many as 660 of the 1,449 NSE-listed were found to have already crossed tenure of 10 years, as on April 1, 2014.
As per Sebi rules, an independent director cannot serve on the board of a company for more than two successive terms of five years each.
"While a fixed term for independent directors is conducive for renewing boards, it would have served a better purpose in case the Companies Act and Sebi would have made this provision applicable retrospectively, with of course a compliance leeway of one or two years given to companies," Haldea said.
"Effectively, no new independent director faces are likely to be seen at least for the next 10 years as a result of this provision," he added.
