Discuss the salient recommendations of the Kotak committee on corporate governance. Why the ministry of corporate affairs (MCA) and Institute of Chartered Accountants of India (ICAI) have expressed concerns over these proposals.

In order to improve corporate governance in listed companies, committee under Uday Kotak was formed. It submitted its report to the SEBI, suggesting a host of changes for bringing in transparency at companies’ boards 

• Panel suggested to split chairman, MD-CEO role of listed companies 
• Panel suggests minimum of 6 directors to be on board of listed entities; every listed entity to have at least 1 independent woman director 
• Committee recommends more transparency on appointment of independent directors; wants them to play a more active role on the boards . It mandates a minimum qualification for independent directors.
• Board of directors to have at least one woman independent director
• Panel suggested maximum number of listed entity directorship to be reduced to 8. At least half of every listed entities board to have independent directors 
• Create a formal channel for sharing information between the promoters and the company.
• Panel suggested Audit Committe  must review use of loans/adv/ investment by holding co in arm over Rs 100 crore 
• SEBI to penalize auditors if any lapses found.

Ministry of Corporate Affairs has expressed concern over minimum qualification criteria for Independent directors. While and Institute of Chartered Accountants of India (ICAI) has expressed concern over penalization power of SEBI

Topics: GS-II: Important Aspects of Governance Transparency and Accountability Citizen Charters