Avoid selective revelations in the COVID-19 era, SEBI tells firms

Ajay Tyagi, Chairman, Securities and Exchange Board of India (SEBI), has highlighted the need for adequate level of disclosures, risk assessment, sound digital infrastructure and high standards of data security during the COVID-19 era.

Addressing the 14th Corporate Governance Summit organized by the Confederation of Indian Industry (CII), Mr. Tyagi stated that SEBI has issued a advisory notice disclosing the impact of the COVID-19 crisis.

He said that companies should avoid selective disclosures when disclosing material information. “Since the onset of the COVID-19 epidemic, corporate boards around the world are facing complex new problems to deal with, with their attendant uncertainties and restrictions,” he said. “Corporate governance is increasingly being discussed on areas such as uncertainty, crisis management and stability,” he said.

The SEBI chief said, “An important area during this epidemic which was amidst uncertainty was the need to provide adequate level of disclosures to stakeholders about the health and performance of the company,”. “The company board should ensure that adequate disclosures are made available to the stakeholders and there is no uniformity of information,” he said. Mr. Tyagi said that the disclosures should include the impact of COVID-19 on business, performance and financials. It is important to ensure that when listed entities disclose material information related to the impact of COVID-19, they should not resort to selective disclosures, taking into account the principles governing disclosures.

Noting that risk assessment has emerged as another major issue, he said that company boards should consider the right risks by staying active in their risk assessment activities.

“This includes focusing on newly emerging risks, regrouping resilience and preparing the organization for any future events that may result in commercial disruption similar to the COVID-19 epidemic,” he said.

He said that the constitution and role of Risk Management Committees (RMCs) of the top 1,000 listed entities were also revised.

In consideration of the separation of the roles of the chairman of the board and the MD / CEO of a listed company, he stated that it would provide a better and more balanced governance structure by enabling more effective supervision of management and not to undermine the promoter’s position For. .