PSUs must get shareholders nod for appointing directors

Listed public sector companies, including banks, will be required to take shareholders’ approval for any appointment or reappointment to the board of directors in the immediate next general meeting, capital markets regulator Sebi has clarified.

In case shareholders do not clear resolution for the appointment, such a person would cease to be a director, it added.

Providing informal guidance to state-owned Bank of Baroda, the Securities and Exchange Board of India (Sebi) indicated that its views might differ on a case-to-case basis.

The clarification came after Bank of Baroda sought informal guidance in relation to amendments made in LODR (Listing Obligations and Disclosure Requirements) rules pertaining to shareholders’ requirement for appointment on the board.