In the wake of the new guidelines proposed by market regulator SEBI, Wipro Chairman Rishad Premji might lose his executive powers in the tech company after 1 April, as per a TOI report.
In 2018, SEBI through its rules had directed the top 500 listed companies in India to ensure that their chairperson is a non-executive director from April 1, 2020. These rules will eventually create a split in the post of chairman and managing director.
These rules were first proposed in 2017 by a SEBI committee, headed by banker Uday Kotak, on corporate governance. The basis of the new rule is to segregate the board of a listed company from its management. Companies were given a time frame of two years until April 2020 to adapt to the changes.
Earlier in 2019, Wipro had approached SEBI with a proposal seeking the regulator’s nod to permit Rishad to continue in the executive role after he took over the reins of the company from Azim Premji in 2019 Though Azim Premji retired as Executive Chairman in July last year, he continued to serve on the board as a non-executive director and Founder-Chairman.
In response to Wipro’s proposal, SEBI had informed that since Rishad would also play an executive role in the company besides being the chairman of the board, the structure would not meet the SEBI’s guidelines to segregate the roles of chairman and CEO ‘in letter and spirit’.
In lieu of these guidelines by SEBI, last year in December, Anand Mahindra had also stepped down from his position and took up the role of non-executive chairman with effect from April 2020.
In order to comply with the SEBI guidelines, changes are imminent in over 214 companies, including banks, public sector enterprises and large corporates, including Reliance Industries Ltd (RIL), Bharti Airtel, Bajaj Auto and Adani Ports.
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