(1) The composition of board of directors of the listed entity shall be as follows:
(a) board of directors shall have an optimum combination of executive and nonexecutive directors with at least one woman director and not less than fifty per cent. of the board of directors shall comprise of non-executive directors;
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(b) where the chairperson of the board of directors is a non-executive director, at least one-third of the board of directors shall comprise of independent directors and where the listed entity does not have a regular non-executive chairperson, at least half of the board of directors shall comprise of independent directors:
Provided that where the regular non-executive chairperson is a promoter of the listed entity or is related to any promoter or person occupying management positions at the level of board of director or at one level below the board of directors, at least half of the board of directors of the listed entity shall consist of independent directors.
Explanation.- For the purpose of this clause, the expression “related to any promoter" shall have the following meaning:
(i) if the promoter is a listed entity, its directors other than the independent directors, its employees or its nominees shall be deemed to be related to it;
(ii) if the promoter is an unlisted entity, its directors, its employees or its nominees shall be deemed to be related to it.
(2) The board of directors shall meet at least four times a year, with a maximum time gap of one hundred and twenty days between any two meetings.
(3) The board of directors shall periodically review compliance reports pertaining to all laws applicable to the listed entity, prepared by the listed entity as well as steps taken by the listed entity to rectify instances of non-compliances.
(4) The board of directors of the listed entity shall satisfy itself that plans are in place for orderly succession for appointment to the board of directors and senior management.
(5) (a) The board of directors shall lay down a code of conduct for all members of board of directors and senior management of the listed entity.
(b) The code of conduct shall suitably incorporate the duties of independent directors as laid down in the Companies Act, 2013.
(6) (a) The board of directors shall recommend all fees or compensation, if any, paid to non-executive directors, including independent directors and shall require approval of shareholders in general meeting.
(b) The requirement of obtaining approval of shareholders in general meeting shall not apply to payment of sitting fees to non-executive directors, if made within the limits prescribed under the Companies Act, 2013 for payment of sitting fees without approval of the Central Government.
(c) The approval of shareholders mentioned in clause (a), shall specify the limits for the maximum number of stock options that may be granted to non-executive directors, in any financial year and in aggregate.
(d) Independent directors shall not be entitled to any stock option.
(7) The minimum information to be placed before the board of directors is specified in Part A of Schedule II.
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(8) The chief executive officer and the chief financial officer shall provide the compliance certificate to the board of directors as specified in Part B of Schedule II.
(9) (a) The listed entity shall lay down procedures to inform members of board of directors about risk assessment and minimization procedures.
(b) The board of directors shall be responsible for framing, implementing and monitoring the risk management plan for the listed entity.
(10) The performance evaluation of independent directors shall be done by the entire board of directors:
Provided that in the above evaluation the directors who are subject to evaluation shall not participate:
Audit Committee.