Shareholder empowerment in India: SEBI’s proposal makes shareholders’ nod more crucial than ever


Shareholder engagement and participation are deep rooted in corporate legal systems around the globe. While the degree of shareholder participation in corporate governance might vary across jurisdictions, the larger principles of shareholder engagement remain the same.

As India’s corporate governance trajectory has its underpinnings in globally accepted principles of corporate law, shareholder engagement and participation are not novel to India. The Indian corporate governance regime, over the course of its evolution, has accommodated effective principles aimed at securing shareholders’ rights and ensuring appropriate consideration of their voices in decisions of significance. However, frequent challenges reflecting the inadequate involvement of shareholders continue to surface in India, calling for appropriate regulatory recalibrations.

To empower shareholders by bolstering their contribution to active corporate governance, the Securities and Exchange Board of India (SEBI) released on 21 February 2023 a consultation paper (the ‘Consultation Paper’) proposing material amendments to the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (the ‘Listing Regulations’). The proposed amendments aim to impose stringent requirements on listed entities to ensure appreciable shareholder participation in key corporate decisions.

Please click here to read the full article by Gaurav G Arora, published in International Bar Association.