TMI BlogPerformance review of Public Interest Directors (PIDs)X X X X Extracts X X X X X X X X Extracts X X X X ..... anner specified by the Board. 2. Based on decisions taken by SEBI Board, the clauses relating to tenure of PID were amended and have been provided in the Regulation 24(3) of Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018 [SECC Regulations, 2018] and Regulation 25(3) of SEBI(Depositories and Participants) Regulations, 2018 [SEBI(D P) Regulations, 2018] as under: Public interest directors shall be nominated for a term of three years, extendable by another term of three years, subject to performance review in the manner as may be specified by the Board: Provided that post the expiry of term(s) at the recognized stock exchange or the recognized clearing corporation / depository, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, NRC shall be primarily responsible for formulation of performance evaluation criteria. The criteria for performance review of PIDs, which shall be considered for both internal evaluation and external evaluation, may be framed by NRC taking into consideration guiding principles provided at Annexure A. These principles would serve as a guidance for MIIs and the same may be adopted by respective MIIs, as considered appropriate, with additional principles, if any. c. Evaluation mechanism: i. PIDs shall be subjected to internal evaluation as well as external evaluation, carrying equal weightage. ii. Internal evaluation : All the governing board members shall evaluate the performance of each PID, on an annual basis at the end of ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d external evaluation both carrying equal weightage, NRC shall consider and recommend extension of his / her tenure to the Governing Board of the MII. The Governing Board of the MII shall in-turn consider and recommend to SEBI if the tenure of the PID is desired to be extended by another term of three years. f. In addition to the other requirements prescribed in performance review policy of the MIIs along-with norms specified in SECC Regulations, 2018 and SEBI (D P) Regulations, 2018, the following may be considered by NRCs of MIIs: i. It shall be ensured that the concerned PID hasn t remained absent for three consecutive meetings of the governing board and has attended seventy five per cent of the total meetings of the governing boar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... criteria for performance evaluation, as provided in Annexure A to the circular, the same shall serve as an illustrative guide for MIIs to frame performance evaluation criteria both for internal as well as external evaluation, and the same may be adopted by MIIs as considered appropriate, with additional criteria, if any. 7. Additionally, with regard to tenure of PID, following is clarified: a. The term of existing PIDs serving in a MII for more than three years, can be extended, subject to his / her performance review and a maximum tenure of 6 years as PID in that particular MII. b. The term of existing PIDs, that have already served for six years or more in a single MII, shall not be eligible for further extension in that MII. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... markets, including any recent updates in this regard. c. Knowledge and Competency: Whether the PID has sufficient understanding and knowledge of the entity in which it operates and the applicable regulatory norms. Whether the PID has sufficient understanding of the role, responsibilities and obligations of PID under the relevant regulatory norms. How the PID fares across different competencies as identified for effective functioning of Board of the concerned MII (The MII may list various competencies and mark all PIDs against every such competency e.g. Constructive and analytical decision making abilities). Whether the PID has sufficient understanding of the risk attached with the business structure. d. Fulfilm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e meeting of Governing board and Committees regularly and timely, without delay. It must be ensured that the concerned PID hasn t remained absent for three consecutive meetings of the governing board and has attended seventy five per cent of the total meetings of the governing board in each calendar year; failing which the PID shall be liable to vacate office. h. Commitment: Whether the PID is adequately committed to the Board and the MII. i. Contribution: Whether the PID has contributed effectively to the entity and in the Board meetings. Whether the PID participates in the proceedings of Board meetings keeping in mind the interests of various stakeholders. Whether the PID actively deliberates and contributes on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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