Listed companies would be required to conduct board meetings to pass resolutions for determination of the nature of loans and advances made by them and fixing a monetary limit on such loans and advances. Sources said that the draft of the Listed Companies (Code of Corporate Governance) Regulations, 2017 has highlighted Responsibilities of Board of Directors and its members.
The decisions on the following material transactions or significant matters are documented by a resolution passed at a meeting of the board: Investment and disinvestment of funds where the maturity period of such investments is six months or more, except in the case of banking companies, non-banking finance companies and insurance companies. Secondly, determination of the nature of loans and advances made by the listed company and fixing a monetary limit thereof.
The board of directors of listed companies would also be responsible for the governance of risk and for determining the company''s level of risk tolerance by establishing risk management policies. Under the regulations, the board of directors shall define the level of materiality, keeping in view the specific circumstances of the company and the recommendations of any technical or executive sub-committee of the board that may be set up for the purpose.
The board of directors shall maintain a complete record of particulars of the significant policies along with their date of approval or updating. The significant policies include but are not limited to the following: As per regulations, board of directors of a listed company shall carry out its fiduciary duties with a sense of objective judgment and in good faith in the best interests of the company and its stakeholders.
The board of directors is responsible for the governance of risk and for determining the company''s level of risk tolerance by establishing risk management policies. The board shall undertake at least annually, an overall review of business risks to ensure that the management maintains a sound system of risk identification, risk management and related systemic and internal controls to safeguard assets, resources, reputation and interest of the Company and shareholders.