The Securities and Exchange Board of India (Sebi) cleared a new set of guidelines on corporate governance on 13 February, which is aimed at protecting the rights of minority shareholders through improved quality of independent directors serving on the boards of listed Indian companies by limiting the tenure and number of directorships they can hold.

Aimed at aligning its own regulations with those of the new companies law that was passed by Parliament last year, the markets regulator has also sought to bring in diversity by making it mandatory for each listed company to have at least one woman director on its board.

A look at the Nifty index on the National Stock Exchange, which lists India’s top 50 companies by market capitalization, throws up many interesting trends. Out of the 220 independent directors of Nifty 50 firms whose tenure is available on Bloomberg, a quarter are ineligible as per the new Sebi norms to continue as independent directors as they have spent more than 10 years in their current capacity.

The oldest serving independent directors in this set are H.R. Manchanda of Cipla Ltd (31 years and 1 month) and Kantikumar R. Podar of Bajaj Auto Ltd (30 years and 4 months).

There are 18 companies out of the 50 that have no women directors on their boards and will now have to appoint at least one as per the revised rules. There are only 42 women directors on the boards of these 50 firms.

Some of the Indian companies that have the largest number of independent directors that have crossed the threshold of 10 years include Mahindra and Mahindra Ltd (seven directors), Housing Development Finance Corp. Ltd (six), Asian Paints Ltd (five) and Grasim Industries Ltd (four).

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