One of the measures of the principles of the corporate governance and protection of minority shareholder is "Equitable treatment to all shareholders". Explain the manner in which a listed company shall ensure equitable t

CS Professional · Corporate Funding & Listings in Stock Exchanges · PYQS · June 2023
One of the measures of the principles of the corporate governance and protection of minority shareholder is "Equitable treatment to all shareholders". Explain the manner in which a listed company shall ensure equitable treatment to all shareholders.

Answer & Explanation:

Equitable treatment SEBI (LODR) Regulations, 2015 provides for the equitable treatment to shareholders as one of the principles. This is also one of the OECD principles of corporate governance. As per the Regulations, the listed entity shall ensure equitable treatment of all shareholders, including minority and foreign shareholders, in the following manner: All shareholders of the same series of a class shall be treated equally. Effective shareholder participation in key corporate governance decisions, such as the nomination and election of members of board of directors, shall be facilitated. Exercise of voting rights by foreign shareholders shall be facilitated. The listed entity shall devise a framework to avoid insider trading and abusive self- dealing. Processes and procedures for general shareholder meetings shall allow for equitable treatment of all shareholders. Procedures of listed entity shall not make it unduly difficult or expensive to cast votes.

Topics: Corporate Governance

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