News: Rishad Premji might leave chairmanship due to new SEBI rules

C-Suite

Rishad Premji might leave chairmanship due to new SEBI rules

According to the new SEBI rules the chairperson of the board must be a non-executive director.
Rishad Premji might leave chairmanship due to new SEBI rules

Wipro’s Rishad Premji might have to conclude the company’s chairmanship if Sebi’s guidelines on segregation of the positions of Chairman and CEO or Managing Director in the top 500-listed companies comes into effect on April 1.

The IT major had submitted a proposal to markets regulator Sebi, seeking its permission to allow Rishad to continue in an executive role following a transition that was on expected lines and was set in motion after his father and former chairman Azim Premji stepped down from his executive role last year.

According to a media report, once Sebi’s new rules are implemented, it will be one of the rare instances where the promoter family — despite enjoying a 74% shareholding in the company — will play no role in the day-to-day affairs running of the IT blue chip.

According to sources, Sources said that Sebi had communicated to Wipro that since Rishad, despite being the chairman of the board will also play an executive role in the company, the structure will not meet the regulator’s rule to segregate the roles of chairman and CEO ‘in letter and spirit’.

The new rule mandates that the chairperson of the board must be a non-executive director. It was first proposed in 2017 by Sebi’s committee on corporate governance, headed by leading banker Uday Kotak. The basis of the new rule is to segregate the board of a listed company from its management. In 2018, Sebi made it a rule and gave top 500 listed companies (by market capitalisation) two years to move to the new structure, which will be effective April 1.

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Topics: C-Suite

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