Regulation 17 of SEBI (LODR) Regulations, 2015 – A Scoop of Compliance Delight

Introduction

Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, plays a crucial role in ensuring strong corporate governance in listed entities. This regulation outlines the composition, appointment, and functioning of the Board of Directors, ensuring transparency, accountability, and fairness in decision-making. Over time, several amendments have refined its provisions, making it a vital part of corporate compliance.

To simplify and enhance understanding, the key provisions of Regulation 17 are structured in a tabular format below:

Key Provisions Under Regulation 17

Sub-Regulation	Heading	Key Provision	Timeline/Frequency	Exemptions, if any	Specific for Market Capitalisation
17(1)(a)	Combination of Directors	a) At least one woman director b) Optimum - Executive and Non-Executive c) 50% - Non-Executive Directors	At all times (Vacancy to be filled within 3 months)	Nil	Top 1000 - At least one Woman Independent Director
17(1)(b) to 17(1)(d)	Chairperson-based Composition	a) Chairperson Non-Executive – 1/3rd Independent b) No regular Non-Executive Chairperson - ½ Independent c) Chairperson – Non-Executive, but related to promoter - ½ Independent d) Outstanding SR equity shares - ½ Independent	At all times (Vacancy to be filled within 3 months)	Nil	Top 2000 - At least Six Directors
17(1A)	Age-based Appointment	Appointment of Non-Executive Director who is 75 years – Special Resolution required	Special Resolution at or before appointment/re-appointment	Nil	Nil
17(1C)(a)	Shareholder’s Approval for Appointment/Re-appointment of Director	Approval within 3 months or next general meeting (whichever is earlier) Public sector company: Immediate AGM after appointment Time taken for government approval can be excluded	At all times	Directors appointed by a financial sector regulator, Court, or Tribunal are exempted	Nil
17(1C)(b)	Directors Rejected by Shareholders	Appointment of officials rejected earlier by shareholders requires prior approval of shareholders. Such appointment must also be recommended by the Board and NRC	NA	Nil	Nil
17(1D)	Tenure of Director	Tenure of any Director – 5 years from appointment/re-appointment	Nil	Whole-Time Director, Managing Director, Independent Director, Directors liable to retire by rotation, Directors appointed by Court/Tribunal, Nominee Director of Financial Sector Regulator, Directors nominated by SEBI-registered Debenture Trustee	Nil
17(1E)	Vacancy	General Vacancy – To be filled by Board within 3 months Vacancy due to expiration of tenure – To be filled by Board before or on the date of vacancy	At all times	If the listed entity fulfils compliance requirements for Director and Committee without filling the vacancy	Nil
17(2) & 17(2A)	Frequency of Board Meetings	Board to meet at least 4 times in a financial year Maximum gap between two consecutive meetings – 120 days	NA	Nil	Quorum for Top 2000 entities – 1/3rd or 3 Directors, including at least one Independent Director

Other Key Provisions Under Regulation 17

Regulation	Heading	Key Provision
17(3)	Compliance Review	Board to periodically review Compliance Report & steps taken to rectify non-compliance
17(4)	Succession Plan	Board to ensure plans are in place for succession of directors and senior management
17(5)	Code of Conduct	Board to establish a Code of Conduct for Directors and Senior Management
17(6)	Fees, Compensation, or ESOP	1. Non-Executive Director remuneration requires shareholder approval in GM 2. If a single NED’s remuneration exceeds 50% of total NED remuneration – Special Resolution required 3. Independent Directors are not entitled to stock options
17(10)	Performance Evaluation	Evaluation of Independent Directors to be done by the Board

Conclusion

Regulation 17 of SEBI (LODR) Regulations, 2015, is a cornerstone of corporate governance, ensuring that listed companies maintain the highest standards of transparency, accountability, and efficiency. By mandating a well-structured board composition, periodic compliance reviews, and shareholder participation, this regulation fosters a responsible corporate environment. Organizations must remain vigilant and proactive in adhering to these provisions to maintain investor confidence and regulatory compliance.

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Article Compiled by:-

~CS J SWARNALAKSHMI

(LegalMantra.net Team)

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